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Airlines profit as domestic aircraft packed to record levels

written by Adam Thorn | December 6, 2022

 

Craig Murray shot this Virgin 737, VH-VUQ

Aircraft flying on domestic routes were once again packed to the highest levels since records began in September.

New BITRE data released by the Department of Transport showed load factors — or the percentage of available seats — were at 85.7 per cent, virtually equalling the record of 85.8 per cent set in July.

The figures also revealed domestic aviation in September was at 90 per cent of pre-pandemic passenger traffic, higher than previous months but down on the 96 per cent in June that led to record delays.

In total, 4.67 million passengers were carried on regular commercial flights in September 2022, compared to the 5.19 million in pre-pandemic September 2019.

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The extraordinarily high load factors, combined with high prices, would explain how the industry is on course to deliver record profits this year.

Last month, Qantas revealed it would target an underlying profit of up to $1.45 billion for the first half of the financial year; Rex’s capital city 737 flights generated a $2 million profit in October; while Virgin has declared it had returned to real profitability for the first time since its damaging ‘capacity wars’ battle with Qantas a decade ago.

It also comes after Australian Aviation reported last week how Qantas expects to carry 8 million passengers over the Christmas period in a huge test of its service and reliability.

The airline said it would both increase the number of flights on key routes and swap in larger aircraft in order to boost capacity.

However, it insisted it will still maintain an “operational buffer”, including standby resources, to manage the surge in customers.

Earlier this year, Qantas ranked as the worst airline for cancellations as it battled staff shortages and sickness absences, but last month bounced back to be the top-performing carrier.

Qantas now said it’s operating at 95 per cent of pre-pandemic levels for the second quarter of the financial year. That number is likely to be far higher over the Christmas period itself.

The Flying Kangaroo said previously that it turned around its poor performance by investing $200 million for the remainder of the financial year to roster additional crew, train new recruits and pay for overtime in contact centres.

Across the industry, the domestic industry peaked at virtually pre-pandemic passenger numbers in June, but it came alongside all-time records for delays being broken that month and in April and July.

Since then, the industry has recruited thousands of extra staff and cut flights to improve the passenger experience.

Domestic aviation’s strong bounce back contrasts with a far more sluggish recovery for international aviation.

In September, 2,095,503 passengers travelled through the country — 40 per cent lower than the 3,496,774 passengers registered in the same month in 2019. The numbers are though 5 per cent better relatively than August.

Those poor figures are largely down to casual tourists failing to visit Australia. Data released by the Australian Bureau of Statistics (ABS) show there were 370,000 “short-term overseas arrivals” in September 2022, compared to 695,000 in September 2019.

However, across the 2021–2022 financial year, just 18 per cent of those listed their reason for coming to the country as being to holiday, compared to 56 per cent who cited visiting friends or relatives.

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