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Qantas aligns with Asia growth
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Qantas aligns with Asia growth

Asia remains a long-term growth opportunity for Qantas Group, with Qantas and Jetstar “playing where we can win in Asia”, investors were told at the group’s recent investor day.

Qantas will play to its competitive advantage to align with Asia’s growth, says group chief executive Alan Joyce. This will be done by exploiting its brand strength, distribution through partnerships and codeshares, low-cost and dual brand know-how, as well as flexibility and its domestic Australian network to capture future growth to and from the region.

The group is also looking to further evolve the role of Singapore as a hub in the region, underpinned by strong point-to-point traffic, investors heard. Jetstar Asia is currently the second largest low-cost carrier in Singapore. Jetstar Asia’s connections with Qantas through Singapore were up 72% in financial year 2019 and are continuing to grow, with top connections from London to Kuala Lumpur, Bangkok, Bali and Phuket.

The Asia-Australia traffic has directionality and market characteristics that require tailored strategies, says Qantas. Indonesia, Thailand, Vietnam and the Philippines all have Australia-outbound strength; Japan and Singapore are seen as balanced markets; while China and Korea are dominated by Australia-inbound traffic.

Within the region, the Qantas Group is already very well positioned in the Japanese market, and it has identified further growth potential. With a dual brand operations between Australia and Japan, it is number one carrier on the route by market share. Further opportunities in Japan will come with Qantas’s recent win of an additional slot at Tokyo Haneda airport, as well as route opportunities through Qantas 787-9s and Jetstar’s new Airbus 321XLRs that are scheduled to be delivered from 2024.

In the domestic Japanese market, Jetstar Japan is well positioned as the number one domestic low-cost carrier and enjoys first mover advantage, having been in the market since 2012. The A321LR deliveries starting next year will offer further growth potential in the market in time for the 2020 Tokyo Olympics. Jetstar Japan now operates 28 A320s, and it is targeting growth to 35 aircraft by fiscal year 2024. In the longer term, the airline has the potential to grow to around 60 aircraft – more than Jetstar’s Australian operation.

The group has a focused network between Japan and Asia through the pan-Asia brand comprising Jetstar Japan and Jetstar Asia. Almost one-third of the world’s population is in range of the A321LR from Tokyo, but Qantas Group is currently only “cherry picking” Japan to Asia routes, it says. The A321LR’s cost base will open up new leisure markets and allow overnight utilisation, it adds.

Japan is the fastest growing North Asian inbound tourism market to Australia, faster than China, as well as the fastest growing outbound North Asia market. The group’s dual brand achieved a 75% market share in financial year 2019, with over 40 Qantas Group frequencies per week. In this market there are “clear growth opportunities”, says Qantas, pointing to Haneda expansion and potential redeployment of Jetstar’s 787-8s following the entry into service of the A321LR…

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