Qantas’s boss Alan Joyce has vowed its international business will be “great” again, as it focuses on reshaping its Asian network, reports Lucy Siebert, acting editor of our sister publication Routes News, from the CAPA Australian Pacific Aviation Summit in Sydney, Australia. The chief executive said Qantas' deal with Emirates had allowed the Australian carrier to focus on reshaping its Asian network and returning it to profitability.
Qantas flies to eleven points directly in Asia and Joyce said the emphasis is now on reshaping the Asian network and leveraging partnerships with key Asian partners in order to increase its network reach into the region. He cited Singapore as an example, where Qantas’ flight timings are no longer dictated by connections onwards to Europe. “In Singapore the timings are delinked from European flights, which allows us to focus on our Asian business carriers,” he said.
Joyce added that building strong relationships with other partners, such as China Eastern, is becoming increasingly important for Qantas, and more partnerships are to be expected in the future. "You will see the 'red tail' flying from Australia to Asia and working with partners there and leveraging those networks," he said.
While the turnaround of the international business is a key priority for Joyce, he added that maintaining Qantas’s 65% market share in the domestic sector, and taking advantage of the “Asian opportunity” by ensuring it has a strong presence in Asian markets were equally important.
Joyce was quick to point out the strength of other parts of the Qantas business, in particular Qantas domestic and Jetstar. He said the combined Qantas and Jetstar network across the Asia-Pacific region was vital for the airlines, and that building connectivity across the Jetstar network had been a priority right from the LCC's inception. "Long-haul low-cost carriers need connectivity - we knew that we needed connectivity into networks from day one. It works for us," he explained
On the capacity front, Joyce believes there is still scope for more capacity to come out of the Australian market. He said there had “definitely been over capacity in 2012”, which had hit yields, but that today capacity is “still some way away from where it needs to be”.
The politics of partnerships
While Joyce talked up Qantas’s partnerships in Asia and beyond, he added he believed that “the jury is out on equity partnerships” of the kind that Etihad is building with the likes of Air Serbia and Jet Airways.
On the Emirates deal, Joyce confirmed that Qantas had spoken to successive management teams from Singapore Airlines and Cathay Pacific over a number of years but had not been able to come to an agreement with them. He also confirmed that Etihad had approached Qantas before Emirates had, but said: “it was a bit like being offered the bike before the BMW”.
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