Qantas CEO Says Domestic Airlines are Showing "Discipline" Despite Sluggish Economy
5th May 2016
Qantas CEO Alan Joyce believes domestic carriers, Qantas included, have responded well to the currently sluggish Australian economy and pre-election worries and have "shown discipline".
Speaking to Australian media after the airline unveiled new pilot uniforms (the first to include female pilot uniforms as well), Joyce said:
"The reality of where we stand is there is some short-term issues that are taking place in the domestic market around the election, around the underlying consumer confidence. It is how you react to it and how your competition reacts to it. If it is disciplined and you are reacting to get the supply right, you will fix those demand problems and that is what we are doing.
"If you get supply in kilter with demand, it doesn't matter how bad demand is, the airlines will do OK out of that. That discipline in the market is there today."
Last month, Qantas revealed that the capacity across both its domestic networks (Qantas and Jetstar) will be lower in the three months to 30th June this year than it was in the same period last year. In addition, Qantas also reported lowered demand in the month of March, when looked by RASK (revenue per available seat kilometers). Bookings for April and May were also soft, added the company.
This resulted in Qantas having to revise the previously expected capacity growth of its combined domestic networks from two per cent in the second half of 2015-16 to a growth of between half per cent and one per cent.
In March, Qantas domestic network's ASK (available seat kilometers) were flat and passenger numbers grew by 1.2 per cent. At the same time, Jetstar's ASK increased 9.6 per cent and passenger numbers were greater by another 9.3 per cent.
According to Joyce, Qantas's transformation program achieved $1.4B in savings to date. He said:
"We can cope with a weak economy and we have shown that we will continue to show that. Our domestic structure is as solid as it has ever been, our international transformation has been working. We are now seeing greater utilisation of our fleet and greater returns out of that business and the rest of our business are performing excellently. What we are experiencing is no different from what aviation has always experienced and will always experience."