Qantas pares domestic capacity growth; Perth and Brisbane remain key battlegrounds
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.
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
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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
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Qantas' top 10 domestic routes (by ASKs per week): 13-Jun-2011 to 19-Jun-2011
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