Domestic capacity "tapering off": Joyce

Domestic capacity "tapering off": Joyce
By admin


Qantas chief executive Alan Joyce has said he will not shy away from raising domestic capacity to protect the airline’s 65% market share position despite admitting there is still an oversupply of seats in Australia.

While capacity growth has slowed since last year, Joyce told a conference in Sydney there are still too many seats in the market,

But he vowed to maintain the carrier’s “profit-maximising 65% market share” even if meant another hike in capacity.

Joyce said he would be “quite happy” if that meant a zero capacity increase and “less happy if it was 10%”, but Qantas would do what it takes to protect its position, he said.

Speaking at the CAPA aviation conference in Sydney yesterday, Joyce said: “Certainly last year there was definitely an oversupply of capacity in the market. We saw 8% growth and underlying growth levels weren’t anywhere near that.

“In the last few months we have seen a tapering off of capacity growth. But it’s still a bit away from where it needs to be. That needs to taper off further.”

Joyce added that Jetstar would “protect its position” in the low cost leisure market where Tigerair has added “significant double digit” capacity.

Turning to the airline’s Asia strategy, Joyce claimed Qantas was in a “phenomenal position”.

By shifting its hub for Europe-bound flights from Singapore to Dubai, Qantas could view Asia in isolation rather than as a stopover market en route to Europe, and focus on the "Asia business traveller".

The carrier has ramped up its Singapore flights and will work not only with Jetstar operations but with partners in individual Asian markets, Joyce said.

The Qantas "red tail" will operate from Australia to Asia and then "leverage the networks" of local partners, he explained.

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