Qantas: Airfares to fall

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August 24, 2016
qantas

Qantas boss Alan Joyce expects airfares to keep falling after a decline of almost 40 per cent over the last decade, while the Boeing 787-9 to be delivered next year, will offer passengers new non-stop options.

Unveiling a record net profit of more than A$1 billion, Joyce said the airline had kept ahead of declining fares through restructuring which had cut costs by  A$1.66 billion while , improving its service and product offering and taking advantage of  new technology such as the 787.

This had allowed it to achieve record results while consumers “have never had it better”, he said.

“Airfares are typically 30 to 40 per cent below where they were 10 years ago. The aviation industry is one of the few industries where every year on average, airfares come down.

“Consumers are getting the best product at lower airfares and what’s great is that thanks to our transformation program we’re making money and we’ve been able to adapt.’’

Joyce pointed to a comparison of fares during the 2000 Olympics where Ansett Airlines had offered airfare specials of $A400 between Melbourne and Sydney.

“Qantas fares today [on the same route] averaged $A160 and Jetstar fares were below $A100,” he said. “If you take Hong Kong, back then the Ansett special was $A1800, we typically have a $A900 airfare to Hong Kong,’’ he said. “But we’re doing that profitably.’’

On the 787-9 the airline will unveil the interior design in late October and early next year the new routes that the aircraft will fly.

Candidates are London-Perth, Dallas-Melbourne and Dallas-Brisbane.

Qantas’s low cost subsidiary Jetstar has a fleet of 11 787-8s in service.

Initially the Boeing 787-9 will used on Qantas’s regional international and domestic routes for operational experience and tickets for those services will go on sale in December.

“Our first flight I still about 15 months away, but I’m delighted to say that Dreamliner flights on our existing network will be on sale before Christmas,’’ Mr Joyce said.

“And shortly after that, we’ll be announcing other international destinations that this state-of-the-art aircraft will fly to.’’

Joyce said 787 customers could expect luxury suites in business, roomier economy seats with better entertainment options and a revolutionary premium economy product “that is streets ahead of anything else out there’’.

Insiders say that the seating configuration will be heavily focused on high yield passengers.