My Account Menu

CAPA Login


Register to trial CAPA Membership!

Qantas pares domestic capacity growth; Perth and Brisbane remain key battlegrounds

16-Jun-2011
Qantas CEO, Alan Joyce
Qantas CEO, Alan Joyce

Qantas yesterday announced a further downward adjustment in planned domestic capacity growth and a corresponding reduction in capital expenditure for the next two years in response to weaker-than-expected demand and high fuel costs.

The Qantas Group is now targetting 5.5% domestic capacity growth for 2011/12 compared with the 8% planned previously. The Group is also reducing its fleet growth and now expects to take delivery of 34 aircraft in 2011/12 compared with 43 previously. Orders for 12 narrowbody jet aircraft will be cancelled or deferred, including three aircraft in the second half of 2010/11.

Perth and Brisbane are key battlegrounds

Qantas CEO, Alan Joyce, said the measures would "help maximise the Qantas Group’s competitive position in the domestic market".

According to CAPA's analysis of forward schedule data from Innovata, Qantas Group will grow capacity on its top 10 domestic routes by an average of 3.3% between now and the start of the next scheduling season at the end of Oct-2011. Qantas is retrenching capacity on two of the 10 leading routes (Sydney-Melbourne and Melbourne Adelaide), but expanding aggressively on routes to Perth from Sydney (+20.9%) and Melbourne (+9.1%) where it faces rising competition from Virgin Australia. Brisbane is another key battleground and Qantas Group is expanding there from Sydney (+7.0%) and Melbourne (+7.8%).

Qantas Group's top 10 routes capacity (seats per week): 13-Jun-2011 vs 31-Oct-2011

Route
Qantas Jetstar Qantas Group % Change
13-Jun 31-Oct 13-Jun 31-Oct 13-Jun 31-Oct
SYD-MEL  45,984  44,868 8861 8773 54,845  53,641  -2.2%
BNE-SYD  26,424  27,561 3976 4956 30,400  32,517  7.0%
BNE-MEL  15,045  16,215     15,045  16,215  7.8%
SYD-CBR  12,438  12,490 3704 3717 16,142  16,207  0.4%
MEL-PER  11,521  12,281 2655 3186 14,176  15,467  9.1%
ADL-MEL  11,413  11,134 3540 3186 14,953  14,320  -4.2%
SYD-PER  11,272  13,184 1239 1947 12,511  15,131  20.9%
SYD-ADL  10,317  10,590     10,317  10,590  2.6%
MEL-CBR  9155  9518     9155  9518  4.0%
PER-KTA  7985  7985     7985  7985  0.0%
Subtotal         185,529  191,591  3.3%

Background Information

Qantas' share price has fallen by over 35% since recent highs in Oct-2010.

Qantas' share price over the past 12 months

Qantas' top 10 domestic routes (by seats per week): 13-Jun-2011 to 19-Jun-2011

Qantas' top 10 domestic routes (by ASKs per week): 13-Jun-2011 to 19-Jun-2011


Want more analysis like this? CAPA Membership gives you access to all news and analysis on the site, along with access to many areas of our comprehensive databases and toolsets.
Find out more and take a free trial.