Qantas Unveils Details of Group Strategy
Qantas has unveiled details of its
strategy through to 2030, as the Australian carrier moves from
recovery to renewal and growth.
At its first Investor
Strategy Day since the COVID19 pandemic, members of the Group’s
Management Committee outlined long-term plans across the key categories of customer experience, sustainability and people.
The group also disclosed plans for maintaining FY24 margin
targets across its flying businesses and announced new earning
targets through to FY30 for Qantas Loyalty and Project Sunrise.
Vanessa Hudson, Group CFO and
CEO-designate, said, “We’re
confident in reaching our FY24 margin targets and we’ve set some
ambitious but achievable earnings goals beyond that, because we
think ambition is key to long-term performance. All of the
extra activity we have planned has to be underpinned by a focus on
sustainability, particularly decarbonisation. We’re determined to
be a leader in this space and that’s supported by the new
commitments we’ve made today, as well as calling for more action
industry-wide in the form of a sustainable aviation fuel mandate.
Our long-term focus remains delivering for customers, employees
and shareholders, and making sure we have a strong business that
generates strong returns is the best way to enable that.”
- Detail on the ‘right aircraft, right route’
approach that underpins the current network and supports new
next-generation fleet arriving from this year onwards (A220, B787
- Plans for an overhauled Qantas app,
launching towards the end of 2023, that will give customers more
control over their bookings, introduction of baggage tracking and
better integration of Qantas Loyalty.
- Changes to Qantas’
boarding process from October 2023 to improve on-time performance
and to better recognise tiered Frequent Flyers, in response to
- Plans to significantly expand the current
range of redemption options for Frequent Flyers.
investment in low fares, particularly by Jetstar, with around 10
million base fares under $100 offered this calendar year and 5
million reward seats via Qantas Loyalty.
- Launching a $400 million Climate Fund to accelerate progress towards the
sustainability targets. This includes a further $110 million
investment in addition to the $290 million (comprised of joint
funding by Qantas and Airbus) already committed.
The fund will focus on stimulating production of Sustainable
Aviation Fuel (SAF), high integrity offsets that deliver dividends
for nature and carbon removal technology, as well as technologies
that deliver on efficiency and waste reduction targets.
for the Australian Government to introduce a SAF blending mandate,
similar to steps taken in other jurisdictions including the UK,
Europe, US and Japan to help kickstart local production. The UK,
Europe and Japan have set or proposed SAF mandates of between 5
and 10 per cent to be reached by the end of the decade and the US
has set a 2030 production target of 3 billion gallons per year.
- Sharing benefits of recovery with all employees –
including ~$11,500 in bonuses in FY23-24 plus ongoing improvement
to staff travel benefits.
- Plans to grow by creating up to 8,500
operational roles in Australia by 2033 to support new aircraft,
- Training and promotional opportunities
unlocked by fleet growth, including via Pilot Academy and
Engineering Academy. The group will deliver around 2 million
training hours this year alone.
- Restoring ‘employer of choice’
status as the industry recovers. Over 160,000 applications
received for 7,000 jobs across the group; attrition rates have
declined from a peak of 18 per cent in December 2021 to an average
of 5 per cent across the group (to as low as 2 per cent for
- Through cost and revenue
improvements, sustain margins of 18% for Qantas Domestic,
15% for Jetstar Domestic from FY24 onwards.
International margins to grow from ~5% pre-COVID to more
than 8% in FY24, and up to 10-12% with Project
Sunrise and evolution of freight.
- Through structural changes to
eCommerce market and Qantas Freight business, targeting $250m in
annual earnings contribution from FY30 onwards compared with
FY19. Of this $250m p.a., $150m p.a. has already materialised, growing to
another $100m p.a. by FY30.
- Introduction of A350 growth aircraft and Project Sunrise
flying expected to deliver significant incremental earnings
increase, reaching an estimated $400+ million EBIT per annum in
first full year of having all 12 aircraft in service.
Loyalty to reach its FY24 EBIT target of $500m-$600m, increasing
to $800m-$1,000m by FY30. Key profit drivers will be continued
expansion into hotels and holidays, more partnerships including
‘points burn’ opportunities with major retailers, diversification
in financial services and growth of the existing Qantas Business
Rewards program for SMEs.
- Targeting $300m p.a. in ongoing
transformation, driven largely by new technology enabling better
efficiency. This includes fleet renewal, better disruption
management, and schedule and workforce planning.
“This is a structurally different business than it
was before COVID, operating in markets that have also changed.
We’re very well placed to take advantage of the opportunities that
creates and the detail we’ve released today shows our strategy to
do it,” said Qantas Group CEO, Alan Joyce. “New technology is
central to our plan and the next-generation aircraft that have
started arriving will transform our network over the next few
years. We’ll be able to serve our customers better, reduce our
cost base through lower running costs and carve out some new
competitive advantages. Our revenue projections and track record
for ongoing transformation show we can invest heavily in people
and technology at the same time as generating strong returns for
shareholders. That’s exactly the kind of national carrier we want
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