Stats show the changing fortunes of Qantas International

VH-VXQ Retro Roo 2 YSSY Victor Pody 16 November 2015
The Retro Roo liveries hark back to Qantas’s international glory days. But the future is looking positive again for the airline’s once-troubled international operation. (Victor Pody)

Buried within the Bureau of Infrastructure, Transport and Regional Economics’ latest monthly international airline activity report is a remarkable stat. For the month of November 2015, Qantas flew 10.7 per cent more international passengers into and out of Australia than it did in November 2014.

When was the last time Qantas International passenger numbers grew by over 10 per cent?

The international passenger market as a whole too grew in November, by 5.7 per cent, but that was well out-paced by Qantas’s growth.

So not surprisingly then, the BITRE report shows Qantas’s share of the total international market into and out of Australia is also up, to 16.3 per cent. This was up from the 15.6 per cent share it held in November 2014, about as low as Qantas’s international marketshare has fallen to.

For so long Qantas International had been the sickly division of the Qantas Group, the once jewel in the crown of a national icon that had progressively shrunk and suffered a string of losses as it has been buffeted by the competitive forces unleashed by one of the most liberal aviation markets in the world.

But as its swing back into profit in the 2014/15 financial year shows – Qantas International recorded an underlying profit of $297 million – Qantas’s international arm is bouncing back into something like good health.

And while it would be wrong to read too much into a single month’s figures – clearly Qantas is not growing international capacity to sustain double-digit growth – the figures do give some indication as to trends in the marketplace.

One of those trends is Qantas’s renewed focus on Asia as the airline has focused on more passenger-friendly schedules and adding capacity to Asia without the restriction of needing to have connections to onward flights to Europe, thanks to its alliance with Emirates that sees it serve Europe over Dubai.

In November traffic to Qantas’s previous hub for servicing Europe, Singapore, grew 19.2 per cent for the month, while Hong Kong was up 14.0 per cent, Thailand up 11.4 per cent and Indonesia up 8.1 per cent.

But the standout market for growth was Japan – Qantas carried 76 per cent more passengers to Japan in November 2015 as compared to a year earlier, reflecting the new Sydney-Haneda and Brisbane-Narita services which came on line in August.

Interestingly, a weak point for Qantas in Asia in November was mainland China. Qantas passenger numbers there fell 8.9 per cent, perhaps illustrating the issues Australian airlines face in penetrating the Chinese market. As Tom Ballantyne reports elsewhere this issue the total Australia-China market passed the one million passenger mark for the first time in calendar 2015, but that market is largely inbound by nature, with far more Chinese visiting Australia than Australians visiting China.

Interestingly, another strong performer was Chile – in November 2015 Qantas carried 22.4 per cent more passengers on its Sydney-Santiago services than in October 2014.

Elsewhere on the network passenger numbers to the US grew a modest 2.0 per cent, while passenger numbers to the UK were essentially flat, and passenger numbers to the UAE, most of whom would be connecting through Dubai onto points in Europe, were down half a per cent.

Those figures give some idea of trends, while the total numbers show the relative importance of different markets. Of the almost 460,000 international passengers Qantas flew in November, 103,000 crossed the Pacific to or from the US and 102,000 were crossing the Tasman. Singapore was the next biggest market (59,600), followed by Hong Kong (53,800) and Japan (34,000), all much larger markets than the 19,500-odd passengers travelling to and from the UK and the 16,000 in and out of Dubai.

Those growth figures, traffic numbers and the fact Qantas International is now profitable suggest validation of Qantas’s strategy for its international operations – cost-cutting, careful allocation of capacity, a greater focus on Asia enabled by the Emirates tie-up to cover Europe, and a continued focus on the US and the trans-Tasman.

That points to a healthy future too for the world’s “most experienced long-haul airline”. New routes seem to be performing strongly, and new aircraft, in the form of Boeing 787-9 Dreamliners are on the way (albeit in modest numbers), while the low cost of fuel means Qantas’s 747s are no longer as expensive to operate as they were only a year or two ago, meaning they could be kept in service for longer to pioneer new routes or bolster frequencies in growing markets.

All that seems to be putting a bit of a spring into the step of “Australia’s Overseas Airline”.

This comment piece first appeared as the NOTAM editorial in the March edition of Australian Aviation.

Comments

  1. ian says

    many private schools now finish their year in late November, which may account for some of the increase in November.