Qantas CEO Alan Joyce says he expects the airline to see a full return to pre-Covid capacity in 2024.
“We’re confident that we’ll get back … 100% of our pre-Covid international capacity, and well over 100% for our domestic capacity,” Joyce projected for financial year 2024.
″[There is] really strong demand in leisure, in business … in corporate,” he told CNBC, adding that the pent-up demand will continue for some time.
Qantas reported record half-year profits in the six months ended December 2022, but shares still closed 6.8% lower on Thursday.
The flagship carrier recorded underlying profit before tax of $1.43 billion Australian dollars ($975.2 million) in half-year ended Dec. 31. It marks a reversal from A$1.27 billion loss in the same period a year before.
Qantas Airways Airbus A330-200 prepares to take off at Los Angeles international Airport on July 30, 2022 in Los Angeles, California.
Aaronp/bauer-griffin | Gc Images | Getty Images
In its earnings release, the airline reported that the key drivers for the results were consistently robust travel demand, higher yields and cost improvements from the Group’s A$1 billion recovery program which is nearing completion.
The road to 100% pre-Covid capacity will not be without turbulence, the CEO said.
The biggest roadblock for Qantas is the supply chain associated with aircraft, Joyce said.
“We’re getting three new 787s that come in the next few months, they are two years late,” he said. This is in addition to the time taken to reactivate their A380 fleet, which he said a lot of maintenance is needed.
“Every maintenance facility around the world is very full because every airline is trying to get their aircraft back up and running.”
The CEO said Qantas will benefit from the return of Chinese travelers, as Beijing shifts away from its zero-Covid policies.
“China is very important for Australia in general because the largest visitors internationally that came to Australia where Chinese,” Joyce said.
“We think that’s going to be great for our economy here, which has a knock-on effect on Qantas.”
According to JPMorgan, China accounted for 15.3% of Australia’s inbound tourism in 2019 — before the pandemic.
Total Chinese arrivals into Australia stood at 1.43 million in 2019, with Chinese tourists racking up a total spending of A$12.4 billion, official data showed.
Qantas is currently re-establishing its operations in Hong Kong, but limited ground handling capacities means the carrier cannot expand as fast as it would like, the CEO said.