Qantas grows revenue, sells Melbourne terminal and operates world’s first zero-waste flight
The Qantas Group has released its third-quarter results for FY19, highlighting corporate travel revenue growth and the sale of its Melbourne domestic terminal.
The company said it remains on track to fully offset the impact of significantly higher fuel costs compared with last year, posting 2.3 per cent revenue growth in the first three months of 2019 to $4.4 billion. Group unit revenue was up by four per cent.
The airline noted that the increase in revenue this quarter came despite a shift in the timing of Easter, which commenced in the third quarter of FY18 (Sunday 1 April), moving wholly into the fourth quarter of FY19 (Sunday 21 April).
This resulted in revenue moving into the fourth quarter, with a favourable alignment between public holidays and school holidays driving very strong leisure travel demand, Qantas said.
Normalising for this shift, group RASK for the quarter grew by 5.5 per cent, measured by ticketed passenger revenue per available seat kilometre.
Qantas said continued capacity discipline in group domestic (down 1 per cent) and group international (down 1.9 per cent) assisted with yield management and recovery of fuel costs.
Group domestic unit revenue increased by 1.1 per cent, in line with company expectations accounting the Easter timing shift. The airline said continued strengthening in the resources market offset weakening demand in other parts of the corporate market.
Qantas’ overall market share of corporate travel revenue increased by 2.5 percentage points in the quarter to its highest level in three years, despite a net reduction in capacity.
“Domestically, demand is mixed,” Qantas CEO Alan Joyce said in a press statement.
“The resources sector continues to grow and we’re capitalising on that with a lot of extra flying in Western Australia and Queensland.
“Leisure demand was very strong over Easter and is holding up well, and we’re pleased with our growing share of the corporate and small business segments.
Joyce said the airline was seeing increased softness in parts of the domestic corporate market for May and June – in particular, financial services, telecommunications and some areas of construction.
“Growth is also slowing in the small business market. We’ll have a better sense of how temporary this is after the Federal Election, which always has a dampening impact on travel demand,” he said.
Market share of small-to-medium business travel continued to grow, assisted by initiatives from Qantas Loyalty.
Group international unit revenue increased by 6.2 per cent over the quarter, with a particularly robust performance by Qantas International.
The airline said network changes drove revenue performance, as well as competitor capacity reductions on long-haul routes in response to higher fuel costs.
“Internationally, the outlook is positive and continues to improve,” Joyce said.
“The long-term fleet and network changes we’ve made are delivering revenue growth, and total market capacity in the fourth quarter is contracting in response to higher fuel prices.”
Performance of Jetstar’s international services was heavily impacted by the timing of Easter and school holidays, with a significant amount of demand shifting to April.
Despite this, unit revenue continued to grow. The broader Jetstar Group saw an eight per cent increase in ancillary revenue per passenger in the third quarter, supported by new luggage options and Club Jetstar membership.
Qantas Loyalty continued to see strong revenue growth from the Frequent Flyer program as well as its other businesses, including Qantas Money and Qantas Insurance.
The company noted several initiatives to be announced in the fourth quarter that will continue to support Loyalty’s performance, with earnings growth of seven to 10 per cent expected for the second half of FY19.
The Qantas Group expects to achieve a record level of revenue this financial year.
Melbourne terminal sale
Meanwhile, Qantas and Melbourne Airport have reached an agreement for the sale of domestic Terminal 1, currently owned by the airline.
Qantas has secured future access to the terminal with a 10-year access agreement for $355 million, with $276 million to be received in cash this financial year. The company says the remaining value will be accrued in the future.
The transaction includes all of Qantas’ aeronautical and retail assets transferring to Melbourne Airport, while the airline will retain exclusive access to Terminal 1, including lounges, for domestic services.
Options to operate some international flights from Terminal 1 outside of peak domestic times will be assessed.
Joyce said it was great that Melbourne Airport was taking a “commercially rational” approach to make the deal possible. However, he highlighted the need for an independent arbitrator for airports that “aren’t commercially rational.”
“That’s why we’re continuing to argue for regulatory change,” he said.
World’s first zero-waste flight
Yesterday, Qantas revealed it would make history as the world’s first airline to operate a zero-waste flight, in a test-flight from Sydney to Adelaide.
After plotting an ambitious path toward becoming the first airline in the world to go closed-circle on aircraft waste, the flight marks the start of Qantas’ plan to fully cut single-use plastics on flights by end-2020.
This comes after the Qantas Group announced in February that it would replace paper tickets by the end of this year, and that it aimed to eliminate three-quarters of its waste by end-2021.
All inflight products on board QF739, flying from Sydney to Adelaide and staffed by cabin crew were either composted, recycled or reused, the airline said.
Speaking yesterday at the flight’s departure, Qantas Domestic CEO Andrew David said the trial flight was an important milestone for the national carrier’s plan to cut waste.
“In the process of carrying over 50 million people every year, Qantas and Jetstar currently produce an amount of waste equivalent to 80 fully-laden Boeing 747 jumbo jets,” he said.
“We want to give customers the same level of service they currently enjoy, but without the amount of waste that comes with it.”
David said this flight would typically produce 34 kilograms of waste – with the Sydney to Adelaide route producing 150 tonnes of waste annually.
“This flight is about testing our products, refining the waste process and getting feedback from our customers,” he said.
About 1000 single-use plastic items were substituted with sustainable alternatives or removed altogether from the flight, including individually-packaged servings of milk and Vegemite.
Alternative products used during the flight include meal containers made from sugar cane and cutlery made from crop starch, all of which is fully compostable.
Email the Travel Weekly team at traveldesk@travelweekly.com.au
-
Latest comments
Latest News
Room to move at Cairns Harbourside Hotel with ‘spacious’ new family package
Moody teenagers can eat two-minute noodles while younger brothers and sisters get to eat free with mum and dad. Win, win!
A&K unveils lavish around the world wildlife adventure in private jet
The kind of your that if you need to ask the cost, you probably can't afford it.
Flight Centre and Reforest hit one million trees target early
Flight Centre and Reforest have hit their inaugural annual target of contributing one million trees – four months ahead of schedule thanks to demand from customers for the agency’s Captain’s Pack. The target was set when the program launched in August 2023 and involves a contribution toward ‘Planting for the Planet’ for every purchase of […]
New cruise options spearhead stacked APT 2025 program
APT has launched its Australia 2025 program, showcasing two brand-new cruising experiences and a $5m refurbishment to APT’s exclusive Mitchell Falls Wilderness Lodge. The highlight of 2025 is Seabourn Pursuit, a purpose-built ultra-luxury ship offering all-veranda suites, exceptional dining, and a dedicated Expedition Team for an unparalleled exploration along the Kimberley coast. Also debuting in […]
Travel Weekly announces a new team to helm Australia’s No.1 travel trade title
Some shameless self-promotion from us, but we thought you needed to know who's bringing you the news.
IHG reveals plans for Brisbane’s first Kimpton in 2028
Just another reason to book that trip to Brisvegas. But don't jump the gun, it's not open until 2028.
Cruiseabout’s first store in five years opens in Perth
Perth gets a break from being behind the rest of the country with the addition of the first Cruiseabout store.
ATAS complaints process acknowledges non-economic loss
A High Court case win over 'disappointment and distress' on a cruise gone wrong prompts ATIA complaints change.
Cunard previews new Queen Anne
Yep, this one does exactly what it says on the tin.
Bunnik Tours unveils latest expansion to Iceland
Just as the Icelandic vikings did many years ago, Bunnik is expanding into new territories.
Australia’s first glamping retreat turns 25
25th anniversary gifts usually come in silver. Ours comes in the way of a news story.
Embrace the journey: Traversing the world with the Shokz OpenRun
If you’ve been on the wrong side of a final call in the airport, or missed the stop on rail journey, it might be time to invest in a pair of Shokz OpenRun headphones. Originally marketed as headphones for fitness fanatics, runners or cyclists with a keen to steer clear of a prang with a car, […]
Tourism Western Australia MD Carolyn Turnbull departs
Turnbull hints her new role will see her staying in the tourism and hospitality industry and who can blame her?
DriveAway launches Brit-Euro Blitz campaign
If agents can put the foot down quick enough and get involved, there are some great prizes to be won.
Fly and Stay Free with the Great Southern
Unlike those dodgy scam phone calls you're getting more and more of, there's no strings attached to this deal.
Sober travel and TikTok guide Australian Gen Z trips
Can you call it a sober holiday if you enjoy a few glasses of red on the flight? We think yes.
Travel DAZE Exec Agenda REVEALED: top execs to speak on airline competition
As the industry reels from Bonza's implosion, it is more important than ever to ask the big questions.
TTC: Deals are driving up demand for September trips
The latest market research from TTC Tour Brands shows interest in international leisure travel remains high for 2024, with 77 per cent of Australians over 18 still planning trips this year. Notably, 28 per cent of those travellers are eyeing September for their journeys. Europe continues to be the most popular destination, with 68 per […]
Skroo says Rex will need deep pockets to fill lost Bonza slots
The door is open for Rex, and anyone else who wants to launch a regional Aussie airline...
Sno’n’Ski Holidays unveils 2025 mega famil to Colorado!
Let the games begin - this is certainly not a famil that you will want to miss!
Walk Japan launches Kyoto: Mountains to the sea walking tour
There are two types of people, one who enjoys walking on holiday and another who enjoys sipping Mojitos by the pool.
Which destination had a 48% boost in bookings following 10 MILLION TikTok views?
Here's a clue: it's not Malabar Beach.
Asher Telford appointed General Manager of SeaLink Whitsundays
Telford has plenty of reasons to smile after SeaLink doubles down and makes him GM after buying his tourism operation.
Qantas ‘working urgently’ to fix app data leak
Qantas is looking into customer reports that passengers have this morning been able to access other passengers’ personal information on the airlines app. X user Lachlan posted that he was able log into different accounts every time he opened the app. My @Qantas app logs me in to a different person each time I open […]
Hilton Expands Presence in North Queensland with the signing of Hilton Garden Inn Townsville
Heading to a North Queensland Cowboys clash? Hilton Garden Inn Townsville is set to open, but not until 2026.
Rail Europe ANZ: making dream journeys come true
Rail Europe's running a lottery! You're not going to win millions, but you might just snag a free holiday.
Bonza’s future on knife edge
It would seem a long road back from here, perhaps a knife's edge is too much credit.
Revamped Wailoaloa Beach hotel opens as Crowne Plaza Fiji Nadi Bay Resort & Spa
Crowne Plaza Fiji Nadi Bay Resort & Spa is open and ready for bookings after the first phase of a multi-million-dollar transformation. Part of IHG Hotels & Resorts’ premium collection, the transformation has seen the completion of 106 guestrooms showcasing contemporary interiors reflective of the premium Crowne Plaza brand and is a first for the […]
Nielsen Data reveals brands spending big to attract Aussie tourists
Trip A Deal, Virgin and Ignite Travel walk into a bar, blow their cash on travel advertising instead of the pokies.
Kamalaya Koh Samui clinches clutch of wellness awards
Kamalaya Wellness Sanctuary & Holistic Spa has so far clinched five prestigious awards in 2024, including being inducted into the ‘Hall of Fame’ at the World Spa & Wellness Awards in London. Founders of the Koh Samui sanctuary and spa John and Karina Stewart expressed their heartfelt gratitude for the awards. “We are profoundly honoured […]
Jetstar offers 200,000 return for free flights to celebrate 20th anniversary
Jetstar hits 20 and everyone else gets the presents with free return flights to domestic and international destinations.
Amora Hotels & Resorts set to double APAC portfolio, announces new Sydney office
Staff in the new Sydney office have been welcomed by a week of rain on the forecast.
RIU opens Chicago hotel and rooftop bar a few steps from the world-famous Magnificent Mile
Rooftop cocktails hold a dear place in your heart? Look no further than RIU Chicago.
How can travel agents best sell cruises? Uniworld’s Alice Ager tells all: Travel Weekly TV
Agents, you don't want to miss this. Yes, that's the case with everything in the newsletter, but we really mean it here!
South Africa bookings are back in action
It's a wrap! South Africa in the news with resumed flights, film fest and booking tech.
Agents’ chance to score free spot on Intrepid trip to Antarctica
This is the trip of a lifetime, even if you are scared of the cold!
…if airlines are really serious in reducing their waste then they should stop serving food and drinks at least for less than 7hours flights…. I guess people can still stay alive without food and drink for 7hours… planes will fly lighter and frequency of passengers using the toilet will be reduced… saves a lot of excuse mes…