Qantas says slot congestion at HK limiting growth

written by australianaviation.com.au | September 9, 2015
Qantas chief executive Alan Joyce speaking at the Royal Aeronautical Society Australian Division lunch in Sydney.
Qantas chief executive Alan Joyce speaking at the Royal Aeronautical Society Australian Division lunch in Sydney.

Qantas chief executive Alan Joyce says slot restrictions at the busy Chek Lap Kok Airport makes it difficult to grow the airline’s service to Hong Kong.

The Flying Kangaroo has managed to secure slots to add four additional flights a week between Sydney and Hong Kong from October on top of the airline’s existing daily service.

While Qantas had been hoping to add a second daily service, it had to settle for just four flights due to a lack of available slots at Hong Kong that suited the Australian carrier’s schedule.

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Joyce it was the slot situation rather than the bilateral air services agreement between Hong Kong and Australia that was hindering Qantas’s efforts to grow its operations in the territory.

“You might have open access or more access in the bilateral but if you don’t have the slots it is academic,” Joyce told reporters after a Royal Aeronautical Society Australian Division lunch in Sydney on Wednesday.

“Unfortunately until the third runway is built in Hong Kong it means there is limited growth opportunities for Australian carriers compared to Hong Kong-based carriers and that needs to be recognised in any bilateral discussions.

“We’ve got plenty of room to grow in the current bilateral, the trouble is we can’t get the slots to grow.”

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Joyce said Qantas had filed for a second daily out of Sydney but managed to only secure four slots after some airlines relinquished their landing and takeoff slots.

“We would love for the slots position to improve because then we would be growing Hong Kong more than we are today,” Joyce said.

The first of the four additional flights a week, to be operated with Airbus A330s, begin on October 26. Qantas schedules show QF117 departing Sydney at lunchtime on Monday, Tuesday, Wednesday and Thursday for an evening arrival in Hong Kong, with the reciprocal QF118 an overnight flight.

Cathay Pacific flies four times a day between Sydney and Hong Kong.

More broadly, Joyce told the gathering Qantas International planned to lift capacity by six per cent in the current financial year, while Jetstar International was expected to grow capacity by eight per cent.

Joyce also spoke out in support of Australia’s free trade agreement with China, which was currently before the federal parliament and said Qantas’s alliance with China Eastern that recently received regulator approval

“We are big supporters of the free trade agreement we think that needs to be approved, that needs to happen and is very important for the Australian economy,” Joyce told delegates at the lunch.

“Every projection says that Chinese tourism for Australia will be in the next decade or so 40 per cent of all tourists here.

“We would like to see a bigger and bigger operation into China.”

“The arrangement with China Eastern could be potentially our biggest arrangement, it could overtake the Americans, overtake the Middle East.”

The airline currently offers a daily service between Sydney and Shanghai, its only destination in Mainland China with its own aircraft.

Qantas International chief executive Gareth Evans said the new Hong Kong flights would give passengers more choice, adding that there was strong demand on its Hong Kong services.

“Customers travelling from Sydney will have the choice of double daily flights to Hong Kong on peak days of the week for business travel and we’ll look at expanding beyond that if the opportunity is available,” Evans said in a statement.

Qantas also flies daily to Hong Kong from Melbourne and Brisbane.

Meanwhile, Qantas said on Wednesday it was adding a fifth weekly flight between Sydney and Manila that will run between December and March 2016. Currently it flies four times a week to the Philippines capital.

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14 Comments

  • paule

    says:

    Well, there you go! The 787-9 won’t be big enough to cater or the growing traffic between Australia and Hong Kong. At last, the A380 will come into its own here! QANTAS can’t get more slots, the only alternative is to use bigger aircraft. Fortunately, QANTAS still have some on order with allocated delivery slots – but will they have the courage to actually purchase them?

  • APT

    says:

    He’s got the biggest toys in the world alread. Use them. That’s what A380s are build for.

  • Boggles

    says:

    Why do qantas worry about hongkong so much?why don’t they create new routes such as a mel-bangkok,so people can go direct instead of going thru Sydney.i think it would be popular ,a daily service.jetstar does it every second day and flights are normally full.

  • BH

    says:

    @ Paule..
    I agree that in this situation the A380 could potentially be the better aircraft for capacity reasons. However, I think frequency is also a big factor here. With Hong Kong being a big business hub having the option to choose between more than one service/flight a day is very appealing to business travelers. It’s that flexibility the Qantas are probably chasing.
    As mentioned in the article, Cathay has four Syd – HK flights a day. That’s real choice and flexibility.

  • Brett

    says:

    The answer is simple Alan; order at least the next two A380’s from Airbus. This will solve the HK problem and also allow for additional capacity when one of the QF wide bodies goes unservicable, which invariably happens from time to time.

  • Rob

    says:

    Well QF gave away a daily QF87/88 SYD/HKG A330 service which supplement the daily A380 service not so long ago. They aren’t expanding into HKG. Even with these so called new slots the still have 3 less flights a week SYDHKG than they had 18 months ago.

  • Dave

    says:

    Surely they had slots for Jetstar Hong Kong that would be availa…..oh!

    This is clearly a disbenefit of having an acrimonious relationship with Cathay, if they worked together and co-operated as Oneworld co-members then these sorts of things could be worked out. But instead QF chooses to fight them, start a low-cost carrier to compete and join up with China Eastern instead. I think they have made some poor strategic decisions here.

  • Ben

    says:

    I’ve never understood why Qantas have never routed QF1/QF2 through HKG. When you look at the great circle distance between Sydney and London it goes practically directly over HKG so as they can’t fly directly, SYD-HKG-LHR is probably the most practical and shortest one-stop route. Also HKG is one of the world’s best airports for passenger experience. @Dave – I agree. I don’t understand why they don’t enter into a strategic alliance with CX. Cathay are a OW partner, a premium carrier in the region (probably comparable to SQ) and are currently expanding in Europe. It makes good strategic sense. Why not work with them rather than against them. Also if they had to partner with a middle eastern carrier I think QR makes sense. They were joining OW at the same time QF was partnering with EK. Also QR don’t fly to SYD so the opportunity exists for a QF1/QF2 flight SYD-DOH-LHR vv (potentially feeding some QR traffic that want to go directly to SYD). QR also offer similar feed into Europe/Africa for a partnership as EK do, maybe not quite as high frequency. QR are also a 5 star airline, a OW partner and there is a brand spanking new airport at DOH specifically designed for the A380. It just makes sense. I’m not really having a go at the QF/EK partnership. I know they’re saying it’s working. It just looks strange when you’ve got alliance partners like CX or QR that you don’t work with. Instead working with someone who is completely unaffiliated with OW.

  • Jason

    says:

    I think you should all go and start your own airline, you’re obviously much more savvy than Mr Joyce and his ilk…

  • Craigy

    says:

    @ Jason. Agree completely

    Qantas did fly MEL HKG LHR in the 2000s. They withdrew from the route around 2010 I think. I don’t remember the reason. The SYD HKG was serviced by an A380 but that was changed to a B747. Now the A380 only does the sector for big events like Chinese New year. As mentioned above, it is frequency that business travellers want. With Cathay in a strong position at HKG, they will continue to have a lions share of the slots making it difficult for other airlines to compete on frequency. Maybe that is something to be looked at when the next air services agreement is negotiated.

    Qantas and Cathay did have a code share agreement for Rome I think but that stopped when the Emirates partnership started.

  • Dave

    says:

    I agree Ben. You join an alliance for a reason, you should use it.
    Obviously Emirates has more destinations than QR, but I agree with you nonetheless. They’ve probably burned their bridges with Cathay now after the Jetstar debacle.

  • Ben

    says:

    Thanks Dave. Also the current top story on this site – CX going to Madrid – Like I said expanding in Europe. I think they’ve also added Zurich recently. I do concede that CX and/or QR do not have the number or frequency of services to Europe/Africa that EK do. (few airlines would) However at least if you’re in an Alliance why not work with the airlines within that alliance? The only OW partner QF now seem to work closely with is AA. That does work and the direct flights to DFW make sense. EK is a juggernaut and the partnership does seem to work. I’m not having a go at Alan Joyce @Jason. If I had the money I would happily start my own airline 🙂 – However in fairness Alan Joyce didn’t start his own airline either, When he was CEO of Jetstar that was started with a direct investment from QF and when he took over QF it was practically handed to him on a platter. Over the time he’s made some good choices and some bad ones (like most CEO’s) All I’m saying is if he doesn’t want to work with other OW partners, then maybe QF should withdraw from the OW alliance and remain unaffiliated like EK. They can still keep their partnership with AA and then choose to compete with other OW carriers like CX, as they are determined to do. At least that would make sense. Rather than advertising that CX is a fellow OW member, but then not working with them.

  • jason

    says:

    Why not put A380s on the daily for capacity then redistribute the A330s elsewhere, like other Australia ports beyond Sydney such as Perth and Adelaide?

  • David

    says:

    Jason, QF flew its B767s (many moons ago) then A330s between ADL and HKG for a long time, but recently withdrew that service. As a regular on that flight, I recall the domestic leg between SYD and ADL being packed, while the aircraft flew half empty to HKG. It has always been very difficult for QF to make international flights from secondary airports, such as ADL, viable for the relatively few passengers, unless state governments provide financial incentives. As a number of domestic flights operate from ADL to MEL or SYD it makes financial and operational sense to have the small number of onward passengers transfer to their international leg at one of the majors.

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