Qantas CEO Alan Joyce believes the airline's greatest growth in the short term will come from the USA and the UK rather than Asia.
Interviewed by PwC for the firm's annual Australian CEO Survey, Joyce cautioned that opportunities in China are yet to mature into a solid business for the airline.
“While the Chinese market has huge opportunities, in the short-term, it’s still a market that is very low yield, very high volume,” Joyce explained.
“The greatest growth for Qantas over the next three to five years – we still believe – is in the traditional markets,” he said, citing the USA and the UK.
“The United States is a huge market for Qantas. We’ve added extra capacity: about 100 frequencies over the peak period, because we see good strength coming out of the US market."
Qantas has added flights from Melbourne to Los Angeles, is re-timing select Melbourne and Sydney flights for afternoon arrivals into LAX, and also last year upgraded its daily Sydney-Dallas service to an Airbus A380.
Read: Qantas revamps Los Angeles schedule with more flights, new times
The airline also launched a small number of seasonal flights between Sydney and Vancouver, with the option to continue those throughout the year should ongoing demand prove strong enough.
"Potential growth" in the UK
As for Blighty, “we still have a big operation into London and we see the UK market also as an area of potential growth going forward.”
Qantas' current UK footprint is limited to London, with daily A380s from Sydney and Melbourne darting via Dubai.
Other cities including Manchester, Newcastle, Birmingham, Dublin, Edinburgh and Glasgow are catered for through the Qantas-Emirates alliance and a stopover at Dubai.
Qantas is tipped to report a $300-350 million profit for the six months from July to December when the airline reveals its six monthly performance towards the end of February, with all divisions of the airline – including its ailing international arm – tracking back into the black.
The pretax underlying profit would be Qantas' strongest performance in the second half of the calendar year (first half of the financial year) since 2010.
Read: Qantas: Alan Joyce flags $350 million profit for July-December
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.
Virgin Australia - Velocity Rewards
19 Feb 2014
Total posts 444
You wont be seeing much growth at London with the restricted slots and already operating the largest aircraft...
12 Jun 2013
Total posts 735
Indeed. And I can hardly imagine QF taking up a second UK city such as Manchester while still having no flights to continental Europe.
Still, maybe they can cut a deal with their best buddies Emirates. One extra landing slot for a LHR-DXB flight for 49% of the company and compulsory headscarves on all FAs. And passengers.
18 Jan 2012
Total posts 12
Qantas has two slots currently leased at LHR to (I believe) BA.
The only growth I can see from the UK though is on QF flight numbers operated by EK. QF do not have the aircraft now or on order to grow the UK market.
QF
02 Nov 2012
Total posts 48
might be more growth in revenue and profitability from increased demand and yields
Lufthansa - Miles & More
29 Jul 2014
Total posts 182
I got a feeling that Manchester could come back to the route map CX have gone to Manchester for more flights could QF and other airlines follow suit time will tell
12 Jun 2013
Total posts 735
Would you really choose to serve Manchester (pop. 514,000 and hardly a tourist magnet) before, say, CDG or FRA? Or perhaps DUS or TXL?
12 Dec 2012
Total posts 1027
QF doesn't want to fly to Paris unless they can do so daily. Under the Australia-France air services treaty, they can't. With 747/A380 sized aircraft, they are limited to 3/week. They could get 6/week with 200-239 seat aircraft and daily with 150-199 seat aircraft.
BER might be good (if it ever opens) where they could then connect throughout Europe via oneworld partner Air Berlin.
12 Jun 2013
Total posts 735
Really? I'd never heard of that treaty. What possible benefit is it to either coutry? After all, it's not like Air France flies to Australia either.
Qantas - Qantas Frequent Flyer
17 Aug 2012
Total posts 2204
It used to benefit both sides in a slightly perverse way, in that QF and AF only had to fly to SIN; they connected there with cross-codesharing on each others' routes. As such,
Qantas - Qantas Frequent Flyer
17 Aug 2012
Total posts 2204
As such, AF could reach multiple Australian ports and QF could funnel passengers onto a daily CDG service.
Qantas - Qantas Frequent Flyer
13 Sep 2011
Total posts 181
MAN may not be a tourist Mecca but it does serve other tourist destinations, it also serves Leeds, the northern UK financial centre and has excellent rail amd road links with other major centres like Sheffield and Liverpool. I recently flew in to MAN on CX and the flight was packed. There are many people in Australia from the northern half of the UK or with family there. However, I think QF have missed the bus, so to speak, and are better using the alliance with EK to serve other UK destinations. As of the rest of the EU, does AJ now regret ditching Frankfurt? I still think his EK alliance is misguided amd still believe he is the wrong man in the job now but he has to make some attempt to turn the group around.
Qantas - Qantas Frequent Flyer
28 Sep 2012
Total posts 132
Manchester has a massive drawcard. Its the gateway to the North West of England and given the rail link into the airport, is the better airport to head into for the entire North of the UK and Scotland.
EK have 3 flights a day... EK17, EK19 and 21 from memory. 2 x A380's and a 777.
23 Jan 2015
Total posts 1
That's the population of the City of Manchester council area. The Greater Manchester population is more like 2.6 million...
13 Sep 2013
Total posts 115
Maybe the rumours about SFO coming back on three times a week could be true after all?
12 Dec 2012
Total posts 1027
I don't see QF paying $10 million+ to reactivate a pair of 747s from VCV.
I could see them keeping OJA, OEB, OJM and/or OJI for longer then planned and maybe redoing the seats like the ERs.
20 Aug 2012
Total posts 119
Bring on SFO I say!
02 Jan 2013
Total posts 142
Good call S. As I stated on Monday, SFO will be on the list for sure and Im sure we'll see a couple of 747's returned to service from VCV to assist in these short term plans.
Qantas - Qantas Frequent Flyer
20 Aug 2014
Total posts 157
Which city could QF possibly serve in the UK? Doesn't Emirates already serve them all? Maybe Dublin? It's really hard to see a QF aircraft going elsewhere in the UK with the current EK tie up. Any more thoughts anyone?
British Airways - Executive Club
02 Dec 2014
Total posts 14
Dublin hasn't been part of the UK for nearly 100 years!
Qantas - Qantas Frequent Flyer
06 May 2012
Total posts 180
Plus Emirates along with Etihad fly to Dublin twice daily so no room for QF there i think
02 Jan 2013
Total posts 142
Possibly LGW Dale?
Qantas - Qantas Frequent Flyer
31 Aug 2012
Total posts 210
Heresy I know, but I wonder if QF would consider GTW slots? This would avoid the nightmare that LHR is, and maybe cheaper landing fees?
14 Jun 2013
Total posts 353
I can't see Qantas flying for LGW (London Gatwick, for those who don't speak fluent #avgeek), it basically serves the same market as London Heathrow so it would just split the traffic. For the UK they need a really new destination like Edinburgh, but I think they would get a lot more benefit by choosing a European destination like Paris, surely one of the biggest drawcards in Europe.
For the USA I would suggest rumours of San Francisco are soon to become reality, maybe the 747 will fly onto Vancouver in the same way LAX has that onwards leg to New York.
QFF
12 Apr 2013
Total posts 1518
Cannot disagree – it would be silly to put more flights to London, they rather better to serve Paris and Frankfurt and may be something of south of Europe like Rome.
As to US and Canada there are plenty of opportunities, especially so with our weaker dollars.
12 Dec 2012
Total posts 1027
As it stands, they don't have the aircraft to do both SFO and YVR unless it's 3 weekly with a SFO-YVR tag. The Canada bilateral only allows 5th freedom rights to Canada via SFO, HNL, PPT or NAN. If they did an LAX-YVR/YYZ tag, it would be limited to through pax only (as LAX-JFK is).
07 Oct 2012
Total posts 1251
They have the aircraft to do 3 x weekly. Particularly if some routes are swapped to A330.
07 Mar 2014
Total posts 11
Obviously he sees the US routes as his best bet.
Use of the word "still" in regards to the UK suggests this market is actually decreasing and "potential growth" is cagey at best. His words here say that it is really in decline with plenty of other options to London from Oz.
In regards to China he is clearly way outgunned by the capacity of the Chinese carriers and he is unlikely to find an Achilles heel there.
12 Feb 2014
Total posts 229
Maybe kill two birds with one stone - Sydney/Dallas/Heathrow? Qantas would once again be a round-the world-airline!
Does any airline do that currently?
11 Dec 2014
Total posts 33
Several airlines do routes kind of like this in the South Pacific. Air New Zealand operate AKL-LAX-LHR-LAX-AKL, Air Tahiti Nui do PPT-LAX-CDG-LAX-PPT and Air France do CDG-LAX-PPT-LAX-CDG.
Air Canada - Aeroplan
29 Jun 2011
Total posts 2
the AF, NZ and TN flights are NOT around the world. they are only MOONING as they don't complete the circle.
Qantas - Qantas Frequent Flyer
07 Mar 2014
Total posts 73
There is no airline that currently does a full RTW. I think NZ were the last one but since they have pulled HKG-LHR they no longer do. SQ almost did when they ran SIN-EWR and SIN-FRA-JFK but EWR is gone. Virgin did if you added all their different airlines together when VS did HKG-SYD but thats gone too
Qantas - Qantas Frequent Flyer
10 Oct 2013
Total posts 113
cant imagine will take on another UK airport - EK is increasing manchester flights and Birmingham flights so no point Qantas doubling up - their EK tie in has limited what it can do surely!?
28 Oct 2011
Total posts 650
YVR or SFO...I'm not fussy....They are both great cities/destinations :-)
17 Jun 2011
Total posts 64
No mention of Europe - I would think at least a single European destination would be a good move forward - Paris would be ideal.
Qantas - Qantas Frequent Flyer
04 Mar 2013
Total posts 48
I see a lot of people saying they should expand, instead, to places like Paris. I couldn't agree more, it would be nice to the red tail back in Paris....that said. The French bilateral is very restricted in terms of capacity and frequency to Paris. For example at an A380 level they would be restricted to 3x weekly service. A 787 service would be, at most, a 5x weekly service based upon current capacity entitlements. The bilateral would have to change dramatically for that to change. I can't imagine Qantas would enter Paris again without being to, at least, build up to a guaranteed daily service. And from the French perspective, le gouvernement français would likely view any Qantas service as a backdoor for Emirates and would be hesitant to grant additional rights.
A nice dream, certainly. Practical reality in the next few years - even with the 787 - not very likely.
Qantas - Qantas Frequent Flyer
28 Feb 2014
Total posts 144
Could they Make the soon to come BNE-LAX-JFK an A380 if they receive new aircraft on maybe a BNE to the UK via DXB or ???
12 Dec 2012
Total posts 1027
A380 is too large for a BNE-JFK/LHR route. 787's would be better. At any rate, no new A380s until at least 2018.
I'm hoping they firm up those 787 options soon. They'd start coming 2016/17.
07 Oct 2012
Total posts 1251
Why? BNE has received a far bit of extra capacity into LA recently and flying a A380 to JFK seems overkill.
21 Jan 2015
Total posts 2
Edinburgh would be great as it isn't serviced by EK currently.
Qantas - Qantas Frequent Flyer
28 Dec 2011
Total posts 95
Also Qatar, and both have good loads into EDI
12 Feb 2014
Total posts 229
We are all reading the tea leaves again.
USA growth is easy to see and has been happening already.
UK growth? Curious. Maybe QF replaces a few EK A380s into Heathrow doing a discrete DBX/LHR shuttle? Would there be advantage for both airlines in that? I vaguely remember him saying when the partnership was announced that it would open up opportunities across Europe for Qantas to fly smaller aircraft, presumably a 787, into other European cities. Barcelona and Berlin were mentioned? EK would feed in traffic, so it would pick up pax from Dubai. It sort of made sense if you were sending a smaller aircraft from say Brisbane/Adelaide/Perth direct to Dubai and then onwards to a smaller European centre than London.
Qantas - Qantas Frequent Flyer
25 May 2012
Total posts 580
They'd be better off operating 7th freedom routes out of DXB to airports where Emirates' fleet of widebodies isn't practical.
An all business class A319 into London City (LCY) would be particularly innovative if they could secure the slots and cooperation from BA and EK.
Qantas - Qantas Frequent Flyer
25 Jan 2013
Total posts 240
Nice to see QF looking at new destinations. My first wish would be to see more internation routes out of Melbourne. It seems like my only options for not having to transfer in Sydney are DXB, LAX or AKL.
I think any move to take pressure of the largest ports such as LAX are a good move. Personally I would like to see SFO for the American market, or perhaps utilising SCL as a one stop port into Central and South America. (Whilst that is admitedly, wishful thinking, MEL to SCL to MIA sounds like a cool journey).
For Europe I'd aim for big tourist meccas such a Paris or Rome. That's just my 50 cents worth.
12 Dec 2012
Total posts 1027
At least Italy has a better air services bilatial then France does.
Italy: "7 frequencies per week with any type of aircraft except supersonic aircraft"
Mainland France: "3.0 units of capacity per week in each direction. 400 seats and above 1.0 unit
360 - 399 seats 0.9 units
320 - 359 seats 0.8 units
280 - 319 seats 0.7 units
240 - 279 seats 0.6 units
200 - 239 seats 0.5 units
150 - 199 seats 0.4 units
aircraft below 150 seats 0.25 units"
Lufthansa - Miles & More
29 Jul 2014
Total posts 182
I have just read an article about vietniam airlines moving to lhr and it says there are 30+ airlines in a wating list for lhr so could Qantas be in the all ready
Qantas - Qantas Frequent Flyer
28 Dec 2011
Total posts 95
Being serviced by 787-900, and later A350 into CDG. VN have a new fleet coming, will be very interesting, as they have a very low overhead.
07 Oct 2012
Total posts 1251
QF already own 4 slots. They use 2 and lease the other 2.
Qantas - Qantas Frequent Flyer
28 Dec 2011
Total posts 95
I cannot see QF getting slots in LHR, as to any of the others well EK have them serviced. I could imagine that EK having spent time and MONEY on the other UK airports would not be happy. For myself I can say that the growth is in MAN and GLA. EK have two flights a day into GLA, and they are looking at making one a A380, such is the volume (Scots hate going thru LHR). As a side point Qatar and Edihad both fly into EDI, with good loads (I believe), at least one chinese airline is looking/or requested a slot into GLA. It would be good if Mr Joyce clarified the issue.
Qantas - Qantas Frequent Flyer
17 Aug 2012
Total posts 2204
QF has two unused slot pairs that they are currently leasing out. These were last used by their own flights during the 744 era; the A380 flights and lower capacity requirements saw them leased to BA.
07 Oct 2012
Total posts 1251
They already have slots... but they have no planes. However doubt we'll see QF add extra flights to UK or Europe as its too plane intensive.
Qantas
19 Apr 2012
Total posts 1424
They could have a A333 ex Perth to Dubai then to Paris, Gatwick or Manchester
25 Jan 2014
Total posts 9
WOW Alan Joyce is only coming to this conclusion NOW, I could have told him this 5 years ago especially with more people flying to the USA from Oz. I can't believe this guy is still CEO of Qantas.
Qantas
19 Apr 2012
Total posts 1424
Ozboy62 Five years ago we were in the midst of the Great Recession, I was getting free upgrades at the point end, the planes were full but not with those that paid the bills, every US airline was losing money hand over fist: the worst possible time to expand, now with the end of the recession is a good time - possibly a wise decision.
Lufthansa - Miles & More
29 Jul 2014
Total posts 182
Just thinking what about any of these just want to know what people think.
Rome,Frankfurt,Munich,Paris,Madrid,Zurich,Geneva or Amsterdam.
Just noted Zurich and Geneva due to a good size and good conections to Franch and Germany.
Qantas - Qantas Frequent Flyer
17 Aug 2012
Total posts 2204
FCO is too weak, FRA is a great place but they abandoned it for whatever reason, MUC is not allowed under the bilateral, CDG is too weak because of the bilateral, MAD is too far west for connections, ZRH is strong but hostile, GVA is too weak, AMS is fantastic but lukewarm.
I always found it odd that they never codeshared with KL ex-SIN, but it's too late now.
Qantas - Qantas Frequent Flyer
07 Mar 2014
Total posts 73
Regardless of which new airport that QF may fly into, the hard part will be breaking many Australians (rediculous) love affair with LHR and their opinion that it's the only airport to fly in or out of.
Thai Airways International - Royal Orchid Plus
15 Jan 2013
Total posts 464
The Question Mark is does one really need LHR to get to the Continent.Any Asian Carrier already goes to places like Paris,Rome,Amsterdam via their home port.
Qantas - Qantas Frequent Flyer
16 Feb 2013
Total posts 13
Edinburgh airport would be perfect for a QF 330 and avoid direct competition with EK who fly frequently from GLA. A truly enlightened approach would be to fly EDI to SIN connecting with the few Oz flights into there and offering an alternative kangaroo route that avoids DXB and LHR. Talking about having your haggis and eating it!
Qantas - Qantas Frequent Flyer
16 Jul 2014
Total posts 20
This is Great but I think Perth should get a route to London possibly through Dubai like they do from Melbourne and Sydney. As there are tonnes of Brits in Perth and Qantas could easily put an A380 on this type of route. Besides poor Perth misses out on any perminant QF International flights. They really need to get there act together.
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