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Qantas Airways is operated as part of the publicly listed Qantas Group. It is the national airline of Australia with major hubs in Sydney and Melbourne and secondary hubs in Perth and Brisbane. Using a large fleet of narrow and wide-body Airbus, Boeing and Bombardier aircraft, Qantas operates an extensive domestic and regional network within Australia as well as international services to New Zealand, North America, Asia, South Africa and Europe. Qantas is a founding member of the oneworld alliance.
Location of Qantas Airways main hub (Sydney Kingsford Smith Airport)
Qantas share price
3,892 total articles
373 total articles
Qantas is expected to post a loss of between AUD700 million and AUD1 billion for the full 2013/14 financial year to 30-Jun-2014 and now faces the unsettling reality that the Qantas Sale Act (QSA) isn’t going anywhere.
Australia’s Federal Government retreated on the planned Qantas Sale Amendment Bill 2014 that would have repealed part three of the QSA, recognising it wouldn’t pass the Senate, and agreed to side with the Australian Labor Party (ALP) to remove foreign ownership limits. The largely pointless compromise revision was adopted on 18-Jul-2014.
The previous provisions prevented any single airline investor holding more than 25% of Qantas and of total foreign airline investment of 35%, capping the total foreign investment at 49%. The new provision simply caps foreign ownership at 49%, with no airline restrictions.
Qantas will refocus its service between Australia and New Zealand to allow greater flexibility to adjust capacity during shoulder and low seasons. While relatively straightforward, Qantas has not previously done this. Qantas in 2013 adjusted monthly seat capacity by -9% to +7% while Air New Zealand adjusted capacity by -19% to +16%, Jetstar by -22% to +22% and Virgin Australia by -15% to +10%.
Air New Zealand has been rewarded with consistently high load factors while Jetstar and especially Qantas have performed weakly in off-periods. There is now an opportunity for closer integration between Jetstar and Qantas. Virgin Australia has had the weakest load factors, perhaps suggesting its move to a premium positioning is not commensurate with its core trans-Tasman leisure traffic. It too may need to revisit its approach.
When Qantas Group informed the market that it would not add domestic capacity in the first quarter of FY2015 commencing 01-Jul-2014, the perceived implication was that the capacity and fare war Qantas had fought with Virgin Australia was over. Virgin's "Game Change Programme" re-positioned the carrier as a full-service airline with business class offering, bringing premium competition to the Australian market for the first time since Ansett's 2001 collapse. Virgin was bullish on growth opportunities while Qantas abided by its strategy calling for 65% marketshare. In borad terms, when Virgin added a flight, Qantas added two.
But the white flag has not been raised. Qantas Group's 1QFY2015 domestic capacity will be flat, but this is comprised of capacity decreases in the Western Australia market (a 10% reduction in intra-WA) and capacity increases in the east coast, mainly around Queensland. The WA market already was so over-capacity that there were never going to be winners. Pulling back capacity is not so much a strategic decision as delayed common sense. More reductions may still be needed. The Qantas-Virgin fight appears set to continue in the country's east.
Over 500 attendees are expected at CAPA’s second annual Australia Pacific Aviation Summit at the Sheraton on the Park, Sydney, on 6-8 August 2014. Bringing together the decision-makers from the South Pacific region’s leading airlines, airports, travel and tourism sectors, the CAPA Summit will also feature many international guests.
The Summit will provide unique insights into the airline, airport and corporate travel outlook for the South Pacific region in 2014/15 and provide a platform for unrivalled networking and business development activity.
The 3-day Summit will feature dozens of high level speakers and panelists, with over 40 airlines attending.
Growth in Middle East-Australia frequencies is slowing as Emirates, Etihad Airways and Qatar Airways approach bilateral capacity ceilngs. Emirates has nearly reached its limit while Etihad will reach its cap when it launches Abu Dhabi-Perth services in Jul-2014. Qatar reached its limit when it opened Perth in 2013.
Qatar is once again considering Sydney, while Etihad would like an additional daily service to each of Melbourne and Sydney, and possibly Brisbane too. But in the short term there are notable developments in the Australia-Middle East market. Etihad's A380 deployment to Melbourne and Sydney represents 25% seat growth over Jul-2014 levels. Once that growth is realised, Etihad will have grown seat capacity 76% since 2013. Qatar meanwhile is planning to down-gauge its new, and only other, Australian city – Perth – from a 777 to A350.
Collectively Gulf carriers flew 11.5% of all international passengers to/from Australia, although the vast majority was from Emirates, Australia's second-largest carrier flying more than half the international passengers Qantas does. Meanwhile Qantas is changing its Melbourne-London service to facilitate better connections, opening 13 more options, while also reducing ground time in London by some 14 hours.
British Airways adjusts its post-Qantas JSA Asian network and partnerships; Qatar Airways to be next
Asia was the storied stopover point on British Airways' services to Australia, which for 18 years from 1995 until 2013 were operated in partnership with Qantas under a Joint Services Agreement (JSA). But markets and allegiances change. As the JSA lost emphasis, and ultimately was dissolved, BA has moved to adjust its Asian network. Whereas BA in 2000 had 40% of its 60 weekly flights to Asia/Australia covered by the JSA, in 2014 it has only 8% of its 120 weekly Asia/Australia flights in a joint venture – and these are now to Japan, in partnership with Finnair and Japan Airlines.
BA's Asian points are now almost entirely point to point destinations, although some stopover traffic persists. Since ending of the JSA with Qantas, BA has reduced Bangkok from a 747-400 to 777-200 service, while Singapore will change to a daily A380 and 777-300ER flight and Hong Kong a daily A380 and 777-200 service. BA reports that in six months it has seen a GBP30 million improvement on its Sydney route, the second most improved route in the BA network. But this is due to a number of factors – aircraft and crewing – not related to the end of the JSA.
Like others, BA will rely increasingly on partnerships and JVs, Cathay (and still Qantas) included. And opportunities with its new oneworld partner, Qatar Airways, are yet to be exploited.