Alan Joyce looks to Boeing 787 as Qantas transformation continues

By David Flynn, May 2 2016
Alan Joyce looks to Boeing 787 as Qantas transformation continues

Qantas CEO Alan Joyce's much-vaunted three year transformation program is on track to write up $2 billion in savings and benefits by the middle of next year as the airline prepares to take delivery of its first Boeing 787.

It'd be a timely segue into the 'post-transformation' era, except that Joyce says the process of transforming Qantas into a lean and sharply competitive airline isn't about to hit a hard stop.

"I don't think you can ever stop transforming in this industry" Joyce told Australian Business Traveller on the sidelines of the launch of new uniforms for the airline's almost 3,000 domestic and international pilots.

That uniform caps off the 2013 debut of the current uniform for cabin crew and ground staff, and is not only the first new uniform for pilots since 2003 but also the first with an outfit designed especially for female pilots.

"We have the accelerated transformation program, and next year is the last year of that, and then post that we'll continue to change and update the business."

"The next biggest opportunity we will have will be the Boeing 787s and the opportunities they create" Joyce said, adding that "in itself that aircraft represents a transformation in new long routes" as well as lower operating costs driven by the Dreamliner's fuel efficiency.

Read: Where will Qantas fly its new Boeing 787 Dreamliners?

Qantas has eight of the next-generation Boeing 787-9s on order, with the first due in late 2017, but with 15 purchase options and 30 purchase rights up its sleeve and plans to eventually replace its older Boeing 747s and Airbus A330s, there's little doubt that additional and larger Dreamliner purchases are waiting in the wings.

And the timing couldn't be better, Joyce says, as Qantas continues its climb towards the largest turnaround in Australian corporate history.

"I think Qantas is in probably the best position I have seen for a long time" Joyce says, "thanks to the hard work by all of our people – we owe credit to everybody in the company about what they've achieved."

The airline is enjoying an unprecedented set of tailwinds, with the results of its cost-cutting program bolstered by continued low fuel prices, although this year will see a measured drawdown on domestic capacity due to softer demand.

"What's happening now is that everything is coming together at the same time, which is great."

"Our financial results for 2015 were the best we've ever had, we're giving returns back to the shareholders, our customer ratings are the best they've ever been, and our engagement with our people is the best it's ever been. We're now investing in (our pilots) with new uniforms and in recruitment of pilots for the Boeing 787s."

Not cutting back at the coalface

Notable in the transformation plan, Joyce calls out, is that at the same time costs were being shaved throughout the sprawling Qantas business empire there was an increased focus on the coalface of passenger experience.

"All the way through the tough times we continued to invest – some of the decisions like the new LA lounges and the new seats on the A330s, they were all decisions made at the really tough times, so we never really stopped investing."

"I don't think you can stop that investment in the bad times, it has to be consistent and it will pay dividends at the right time."

Read: Qantas to open new London Heathrow first, business class lounge

Qantas is close to completing the upgrade of its Airbus A330 fleet to the new Business Suite business class seating, with only one more A330-300 to go under the knife while the remaining eight A330-200s will be refitted before the year is out.

On the lounge front, the back end of this year will see the opening of new domestic and international lounges at Brisbane Airport, including an all-new international 'premium' lounge combining the current first and business class spaces.

Read: Four new Qantas lounges will open at Brisbane Airport this year

Auckland is tipped to be next in line for a major lounge make-over, as Qantas uniform designer Martin Grant turns his hand to creating new pyjamas for first class and business class travellers.

Follow Australian Business Traveller on Twitter: we're @AusBT

David

David Flynn is the Editor-in-Chief of Executive Traveller and a bit of a travel tragic with a weakness for good coffee, shopping and lychee martinis.

Qantas - Qantas Frequent Flyer

10 Apr 2013

Total posts 388

Hey David it's 8 A330-200 and 1 A330-300

24 Oct 2010

Total posts 2425

Thanks mate, early morning pre-coffee transposition!

Qantas - Qantas Frequent Flyer

10 Apr 2013

Total posts 388

international A330-300

Qantas - Qantas Frequent Flyer

31 Aug 2015

Total posts 126

The new route possibilities are exciting and all, but I'm still hoping Qantas will ditch the ridiculous 3-3-3 seating arrangements. Would be a massive improvement of passenger experience on board. 

02 Mar 2013

Total posts 32

It would be nice to think so, because the back of a 787 is not somewhere I ever want to spend a lot of time again. (A330 is more than fine).

I can't see any way that Qantas would put in anything other than the norm, which is why is hope that they'd look at the a330neo and A350 as an alternative to signing for more 787s. 

According to Seatguru, Qantas' Economy seats in an A330 are only 17" to 17.5" (their A380 Economy seats are 17.5") so it seems reasonable to suspect the Dreamliner wouldn't be a massive downgrade. If they play a little with the armrest widths (i.e. make the edge armrests thinner by about half an inch each) they could have the same seat width as their A380s on their Dreamliners.

Qantas - Qantas Frequent Flyer

02 Jul 2011

Total posts 1390

No chance -- you simply can't afford your economy seat to be 10-15% more expensive in cost base than your competitors

17 Jun 2011

Total posts 66

I have flown a few times on AC in their 3-3-3 config and it was very comfrotable and I am not a small guy!

If QF have the same levels of comfort on their Dreamliners there will be no issues. 

21 Jul 2012

Total posts 127

Was that on the 787 or the 777 though?

Qantas - Qantas Frequent Flyer

09 Feb 2015

Total posts 310

I was in the Qantas lounge the other day and there is currently no sign of any construction work happening.

Qantas

02 May 2016

Total posts 56

Would be nice to see Qantas fly the 787 on the SYD/ORD route......with both DFW and ORD as direct routes out of SYD, leveraging AA's 2 biggest hubs will provide a huge amount of flexibility and options in and out of Australia

Qantas - Qantas Frequent Flyer

26 May 2014

Total posts 450

The  Related News Items panel on this story includes "Qantas tips April for reveal of Boeing 787 seats, interiors".   Any updates ?

24 Oct 2010

Total posts 2425

Nope.

Qantas - Qantas Frequent Flyer

10 Apr 2013

Total posts 388

VH-QPJ the last a330-300 is due to start refurbishment tomorrow

It would be nice if someone wrote an MBA case study on Qantas' turnaround.

It would be very interesting to read.

27 Aug 2013

Total posts 25

Indeed, a warts and all summary would be nice. But in reality, we'll probably never know the juicy bits, just the spin.

Where is Edward Snowden when you need him!

Qantas - Qantas Frequent Flyer

17 Aug 2012

Total posts 2223

Considering Snowden's current circumstances, I don't think he'd be Russian to investigate Qantas.

Hey watson you lurker! Welcome back! Lame joke by the way...lol

Qantas - Qantas Frequent Flyer

17 Aug 2012

Total posts 2223

I think it was a fitting entrance :P

Qantas - Qantas Frequent Flyer

02 Jul 2011

Total posts 1390

While I agree there has been investment in aircraft interiors and lounges, there has actually been a massive gap in deliveries of new aircraft (admittedly second hand and third hand (originally with Qantas) 332s back from Jetstar, and a few second hand 717s).

Last A380 - Dec 2011

Last A330 - Nov 2012

Last B737 - Nov 2014

By the time the first 787 gets to Qantas it will be the first new jet in almost three years.

That gap in capex has certainly helped Qantas in the difficult times

17 Jun 2011

Total posts 66

Am I the only one who thinks the majority of the so-called turnaround has nothing to do with Alan Joyce and all to do with oil prices?????

If oil was still at an all time high surely the picture wouldn't be so rosey!

And for the umpteenth time when are the fuel taxes going to be scrapped? Jets need fuel to fly it is the cost of doing business when you're an airline.

31 Mar 2016

Total posts 644

Yes, I believe U're probably the only one.  This is due to the simple facts as below:

1) A low fuel price environment benefit every longhaul operator(More or less proportionally depending on total fuel consumption by the fleet) serving AU so QF is not the lone beneficiary.

2) Yet QF financially still comes out ahead of its peers(SQ in particular) during the same period.

Logical conclusion:  Something else unique and unrelated to oil price happened @ QF but not @ competitors during the same period causing QF to outperform relative to most  peers.  In financial mkt-speak regardless of being in a bearish(e.g. when there's a war) or bullish(e.g. low oil price environment) mkt, it's known as out-performing the mkt benchmark.

Now, we can debate what exactly was that something else unique....be it AJ's lucky charm, grace by the desert lords @ partner EK, good old pure mgmt vision+execution skills or whatever.  The point is that something unique did happened @ QF and returned better than benchmark results.

17 Apr 2016

Total posts 15

Have flown on the Dreamliner twice in Y, it's no dream I can tell you!  There is no room for your feet with the IFE box under the seat in front, and the seats are way too hard. The 777-200 is much more comfortable.


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