Qantas 'needs new markets'
- Latest News
- Friday, 04 February 2011
The warning came from the airline's chief executive officer Alan Joyce, who said that from a customer perspective, the airline was "very confident" in the quality of its international business. "But the fact is, in a financial sense, we are falling significantly short of where we should be."
In an address in Melbourne, Joyce said capacity had flooded into Australia from China, the Middle East and elsewhere.
"To give you an idea, total growth in direct aviation capacity to Australia between 2003 and 2009 was 39 per cent. Meanwhile, total inbound passenger growth was only about 10 per cent."
"So that tells us these carriers are not growing the market, but simply taking existing demand. And the result is that Qantas's international market share has fallen from 35 per cent to 20 per cent.
Meanwhile, the majority of our Qantas assets are tied up in this part of the business and it absorbs the majority of our capital expenditure.
"As an end-of-the line carrier, serving a market of 22 million people, in a marketplace flooded with so much capacity that our competitors aren't even using their full quota, we face severe limits to growth.
If we continue our current path, there will be a real question mark over the viability of Qantas International. And I have no intention of letting our flagship business decay through lack of action."
Joyce said the Qantas Group had set up a task force to explore options that would invigorate the business, generate new and profitable markets, and protect jobs and assets. "Qantas is a great international airline. It is time we looked at opportunities to become a great global airline."
