16-Oct-2009 11:19 AM

Qantas seeing improvement in demand, especially in Economy. Yields still "terrible"

Qantas CEO, Alan Joyce, stated the carrier is starting to see an improvement in demand, especially in Economy travel (The Australian, 16-Oct-2009). As a result, the carrier is now considering increasing Economy and Premium Economy seating on some short-haul international services, potentially reducing the number of premium seats. The move is aimed at improving yields by approximately 8%. However, the carrier does not plan to replace further Qantas services with Jetstar operations.

Qantas: "We are seeing some life in the marketplace. We are seeing, in recent months, the volumes being a bit better than we were expecting. Yields are still terrible, but we are getting some high seat factors, which is a good sign. The first prerequisite of getting the yields back is that the demand is there…Our yield is still over 20% down internationally and in the low teens down domestically, but volumes are better than expected…One of the things we are looking at is what is the right mix of seats and how they should be laid out to optimise the amount of revenue-generating capacity on each aircraft. We are still going to be a first-class airline - we are absolutely committed to that - but do we need first-class everywhere? If things turned around, I could easily see, in a couple of years when the business market is returning, that Qantas could have a greater growth than Jetstar. We have decided that, with Qantas, we have gone to a minimum network, a network we can't drop below." Alan Joyce, CEO. Source: The Australian, 16-Oct-2009.

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