Qantas Aims High For Passengers, Environment & Profit

May 30, 2023

The Qantas Group is charting a new flight path built around customer connection and environmental focus in the past COVID world.

JOIN: YouTube Channel

GET: Accurate MH370 Information From Newsletter

In its first Investor Strategy Day since the pandemic, members of the Group’s Management Committee outlined long-term plans across key categories of customer experience, sustainability and its staff.

But at the same time, it has set lofty goals for maintaining FY24 margin targets across its flying businesses and it announced new earning targets through to FY30 for Qantas Loyalty and Project Sunrise.

Key to the new course is its “right aircraft, right route” approach that underpins the current network and supports the new A220 and A320neo family, as well as its 787s and A350-1000s.

The airline said that with these aircraft come new routes, more comfortable cabins, less noise and less carbon emissions.

On the passenger side an overhaul of the Qantas app, launching towards the end of 2023, will give customers more control over their bookings, introduction of baggage tracking and better integration of the Qantas Loyalty program.

The airline will also change the boarding process from October to improve on-time performance and better recognise tiered Frequent Flyers, in response to customer feedback.

Qantas also announced the launch of a $400 million Climate Fund which is the largest of its type for any airline it claims.

This will accelerate progress towards the Group’s sustainability targets.

The fund will focus on stimulating the production of Sustainable Aviation Fuel (SAF), high integrity offsets that deliver dividends for nature and carbon removal technology as well as efficiency and waste reduction targets.

Qantas is also calling for the Australian Government to introduce a SAF blending mandate, similar to steps taken in other jurisdictions including the UK, Europe, the US and Japan to help kickstart local production.

The airline plans to hire another 8500 staff by 2033 to support its growth plans while sharing benefits of the recovery with all employees including $11,500 in bonuses in FY23-24 plus ongoing improvement to staff travel benefits.

Plans to grow by creating up to 8,500 operational roles in Australia by 2033 to support new aircraft, additional flying.

Qantas maintains that through cost and revenue improvements, it expects to sustain margins of 18 per cent for Qantas Domestic, 15 per cent for Jetstar Domestic from FY24 onwards.

It said that Qantas International margins will grow from 5 per cent pre-COVID to more than 8 per cent in FY24, and up to 10-12 per cent with Project Sunrise and the evolution of freight.

Qantas told the Investor Conference that the introduction of A350 aircraft and Project Sunrise flying is expected to deliver a significant incremental earnings increase, reaching an estimated $400+ million EBIT per annum in the first full year of having all 12 aircraft in service.

Qantas Group CEO Alan Joyce said: “This is a structurally different business than it was before COVID, operating in markets that have also changed. We’re very well placed to take advantage of the opportunities that creates and the detail we’ve released today shows our strategy to do it.

“New technology is central to our plan and the next-generation aircraft that have started arriving will transform our network over the next few years. We’ll be able to serve our customers better, reduce our cost base through lower running costs and carve out some new competitive advantages.

“Our revenue projections and track record for ongoing transformation show we can invest heavily in people and technology at the same time as generating strong returns for shareholders. That’s exactly the kind of national carrier we want to be,” added Mr Joyce.

Group CFO and CEO-designate, Vanessa Hudson, said: “We’ve been clear on the significant level of investment in the pipeline and today we’ve given some detail on the returns we expect from it.

“We’re confident in reaching our FY24 margin targets and we’ve set some ambitious but achievable earnings goals beyond that because we think ambition is key to long-term performance.

“All of the extra activity we have planned has to be underpinned by a focus on sustainability, particularly decarbonisation. We’re determined to be a leader in this space and that’s supported by the new commitments we’ve made today, as well as calling for more action industry-wide in the form of a sustainable aviation fuel mandate.

“Our long-term focus remains to deliver for customers, employees and shareholders, and making sure we have a strong business that generates strong returns is the best way to enable that,” added Ms Hudson.