Jetstar’s Hrdlicka forecasts long wait for demand to catch up with capacity

written by australianaviation.com.au | October 3, 2014

AIRBUS A320 JETSTAR HBA AUG13 RF IMG_9971Jetstar group chief executive Jayne Hrdlicka says it will take years for the market to catch up with recent capacity increases amid weak retail spending and sluggish consumer confidence.

Hrdlicka says underlying demand is “not growing at the pace we would love to see it”.

“There is no doubt that we see a weak consumer environment and that will continue as long as it continues and we are hopeful that consumer confidence improves,” Hrdlicka told reporters after speaking at a business lunch in Sydney on Friday.

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While there were still too many seats for available passengers currently, Jetstar continued to post healthy capacity increases based on recently published data.

Qantas’s monthly operating statistics showed Jetstar grew available seat kilometres (ASK) by 4.5 per cent in Australia over July and August, compared with the prior corresponding period.

That represented an additional 135 million ASKs so far in the new financial year, compared with 2013/14.

By contrast, Qantas domestic and QantasLink reduced ASKs by a combined 2.8 per cent over July and August compared with a year ago.

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Hrdlicka says the low-cost carrier was always on the lookout for opportunities to enter new markets.

“I can assure you nobody has a foot over any accelerator that relates to capacity at the moment,” Hrdlicka said in response to a question.

“We are very driven to drive outcomes for our shareholders, very conscious about where our opportunities are to stimulate new traffic into the marketplace and we are very clear about the importance of absolute focus – short-term, medium-term, long-term – on what’s healthy for each of our businesses.”

Qantas has guided the market to zero capacity growth across its domestic Qantas mainline and Jetstar operations in the first six months of 2014/15.

Virgin Australia has not offered any capacity guidance for the period ahead for itself or its 60 per cent owned Tigerair Australia.

While Tigerair’s August operating have not been released, the July figures showed the low-cost carrier grew ASKs 13.6 per cent in the month.

Jetstar domestic was about three and a half times the size of Tigerair, based on ASKs flown each month.

“Capacity is normalising with underlying demand. It will take a few of years for all markets to grow into the capacity that is there but the outlook is now really encouraging,” Hrdlicka said.

“In Australia, we are very confident in our position.”

Virgin Australia chief executive John Borghetti said recently growth at Tigerair would be pursued as long as it did not cannibalise Virgin.

“Growth in Tiger will be there but it is never going to be the sort of growth you have seen with Jetstar,” Borghetti told Fairfax Media on September 29.

Jetstar group chief executive Jayne Hrdlicka at a business lunch in Sydney.
Jetstar group chief executive Jayne Hrdlicka at the business lunch in Sydney on Friday.

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2 Comments

  • John

    says:

    good luck NTL trying to increase charges. I think Jetstar will want charges reduced or flights will be reduced further in & out of NTL.

  • Glen

    says:

    This proves something I thought a couple of weeks ago that Jetstar and Joyce don’t have a clue. The idea of adding even more seats to the Qantas 737-8s is madness. They be going the other way less seats and more leg room then maybe more people would want to fly Qantas not everyone want to cramed in like sardines.

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