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Only Qantas can make Project Sunrise profitable, says Joyce

written by Adam Thorn | February 4, 2021

Qantas is the only airline in the world with the ability to make ultra-long-haul, Project Sunrise-style flights profitable, chief executive Alan Joyce has explained.

In an interview with Brussels-based Eurocontrol, Joyce said that this is because global airlines would only require a handful of aircraft to fly to Australia, whereas an Australia-based airline would require a bigger fleet allowing economies of scale to kick in.

In March 2020, Qantas agreed to a deal with the Australian and International Pilots Association (AIPA) for its members to fly the London and New York to Sydney/Melbourne routes. However, later that month its order for the 12 A350-1000s was pushed back as the COVID crisis grounded all international flights.

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Nonetheless, Joyce reiterated the now-suspended plans could resume later this year, with a view to launching direct flights from London to Sydney in 2024.

“It is a unique opportunity for Qantas because Australia’s so far away from everywhere,” said Joyce “And we could justify a fleet size of a significant amount of aircraft that makes it economic.

“We have three major cities on the east coast in Brisbane, Sydney and Melbourne. And having flights to London, Frankfurt, Paris, New York, Chicago, Rio de Janeiro and Cape Town, from those cities, creates a significant sub fleet and economics of scale that we think will work really well.

“So we’re still very keen on it. And we think that’s one of the big things that will change in the next decade, and allow us to have a substantial competitive advantage that nobody else is probably going to introduce.”

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It comes weeks after Joyce said in a separate interview that while the business would “obviously” not put in an order until international markets recover, he was still “very optimistic” about Project Sunrise.

He added that the slightly shorter Perth-London 787s flights were the “best route on our network” and expected the same for those to the eastern states of Australia.

Project Sunrise has not been without its controversies, with AIPA president Mark Sedgwick hinting last year that the COVID-19 crisis played a part in pilots agreeing on a deal to fly the long route.

“This is an incredibly uncertain time for our members, with many stood down from flying on no pay, with no end in sight,” said Sedgwick. “When we return to flying, our expert pilots will be at the helm as part of Qantas’ ultra-long-haul services.”

The vote brought to an end a bitter wrangle between the two camps, with Joyce at one stage threatening to bring in Chinese pilots to fly the aircraft if no deal could be struck.

Meanwhile, Joyce also used the Eurocontrol interview to argue that he believes the airline’s A380 fleet will still be profitable when the COVID crisis ends.

The last of the business’ 12 A380s flew to a Californian desert boneyard in September and there has been much speculation as to whether the aircraft would fly again. Most notably, in May last year, Air France retired its fleet and Airbus has already begun suspending production.

“We do have scheduling windows, because if you if you’ve ever been in LA, at between 10 o’clock and midnight, you see six or seven Qantas aircraft departing to Australia, because it’s the only time that works with curfews, so instead of flying multiple frequencies right on top of each other,” said Joyce.

“An A380, that’s fully or nearly fully written down, if it generates cash, will absolutely work. Airports that have slot restrictions, like Heathrow, where a slot is extremely expensive, then the aircraft works for that. And the similar scheduling windows that worked for Australia are unique.

“So we do believe there’s a need for that fleet. And we do believe that it will generate cash. And it’s all going to be about cash when we start up international.”

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15 Comments

  • DM

    says:

    The most frustrating thing about this pandemic is now we have to listen to this spin from QF for an extra two years before they announce the economics don’t stack up. Good for promotion, bad for business.

    • GT

      says:

      AJ clearly studied at the Bob Carr School for Repeatedly Announcing Nothing In Order To Stay Relevant.

  • Steve A

    says:

    We’ve had 12 years of Alan Joyce’s standing on his soap box and puffing his chest out saying,” look at me. Aren’t I great?”
    Another two years is not much.
    His specialty is talking about doing something for 5 years, and then not doing it.
    And if you consider that he gave Qantas shareholders absolutely zero dividends for an entire 7 years while he was stuffing his loot bag, and no profits whatsoever over his entire 12 year stint, but instead a loss during his time ( profits minus losses is negative), then there is absolutely nothing that he has to say that’s worth listening to.
    Way past his best before date and needs taking off the shelf.

  • ndgjhfd

    says:

    “global airlines would only require a handful of aircraft to fly to Australia, whereas an Australia-based airline would require a bigger fleet allowing economies of scale to kick in”

    What difference does it make if the planes are going to Australia or are Australian based? Is he not aware that the A350 has been around for a few years already and that several airlines already have fleets bigger than 12? A350 operators using them on more routes than just to Australia will get even bigger economics of scale. BA already has half of a 18 strong fleet of A350s on order and if they added a few more to compete with the sunrise flights, they’d enjoy better economics of scale from their A350 fleet size.

    • Warwick

      says:

      BA hasn’t the funds to order A350’s to their specific design, as has QANTAS.
      So QANTAS CEO Alan Joyce is quite correct in what he’s saying.

  • Debbie Mitchell

    says:

    When can Australian citizens get home from Pacific islands

  • David G

    says:

    Interesting that Cape Town is to be the South African gateway after decades of Qantas flying direct from Sydney to Johannesburg.

  • Anthony Mould

    says:

    It’s a shame that Alan Joyce has turned into an attention seeker and is becoming a lot like Donald trump telling lies for his own gain trying to discredit the opposition and blowing his own trumpet far out in the future
    Who cares by then things change and he has cried wolf to many times
    For a man that I once admired very much has lost me and is not fit to run Qantas
    I am a lifetime gold frequent flyer and love my airline but this guy is in dreamland and should move over

  • Pete

    says:

    Why on earth would you fly to Rio when all the money is in São Paulo?

    I would also suggest that SQ might take issue with the arrogant proclamation that only QF can make ULH profitable.

  • Dee

    says:

    Can’t see SAA returning to Australia, so QF will have a monopoly on the direct route to Cape Town should they purchase the A350-1000.

  • Peter

    says:

    Never book airfares now or in advance. The airlines are securing your business with no intention of refunding your money. Your locked into that airfare and have to use it at a latter date. This is how the airlines are profitting. Mr Joyce needs to take a paycut, instead hes cutting budgets from other parts of the industry but his own bottom line.

    • Warwick

      says:

      Solve your problem…..buy a refundable-type airfare.
      You want the cheapest non-refundable airfare, then don’t expect a Refund. This is a condition of purchase, which YOU agreed to at purchase time.
      The latest ability to change QANTAS flight dates, WITHOUT a change fee is advantageous to customers’.

  • William Rowland

    says:

    I think that Joyce’s point was that Qantas is the only airline for which this investment makes as much sense. They are talking about a sub-variant of the A-350 that will be specifically built for QF, one that would not make sense economically for other airlines because its economics compared to a standard -1000 would be less attractive on shorter routes. Australia and NZ are the far end of the line for most airlines so it may not make sense for Delta or BA to purchase aircraft that are not economically viable on shorter routes. That being said, Singapore Airlines has now made that wager – twice. It’s an interesting debate and I do hope that Project Sunrise does come to pass. I have flown non-stop from EWR to SIN and it was a great trip.

  • Chelsea

    says:

    I do not believe Qantas will not have a bright future because Alan Joyce does not care about their customers at all! And this not caring culture has been established and extended to the front line staffs, even the customer complaints team. I believe the decision makers in Qantas is not focusing on the fundamental of the business but creating all the fireworks that look good! It takes long to establish a culture but it would take much longer to change unfavorable culture. I would never invest in Qantas as I do not see any bright future in this company as its “thinking” is not right!

    • Warwick

      says:

      What a load of clap-trap!
      I’ve been flying QANTAS for multiple decades’, & never had the problems, in dealing with many departments’ of the Company, which you think exist.
      Maybe it’s the way I treat all their staff, with courtesy, good manners’, & like humans’, not machines’.
      These go a long way to a happy experience with personnel, of any company, actually.
      If you’re demeaning, condescending, pushy, or argumentative to people, that’ll get their backs up rapidly.
      I’d say your attitude to them is the cause of your problems.
      I’ve dealt with personnel for many a year, so I do know what I’m talking about.

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