Qantas results: What does it mean for you?

QANTAS reckons a drastic shake-up will turn its record loss into a profit as early as this year. So what does that mean if you fly with them? Cheaper fares?

YESTERDAY, Qantas made airline history by posting a record loss of $2.84 billion. CEO Alan Joyce is standing firm despite calls for his head.

He’s predicted the airline is back on the fast track to profit as early as this financial year, thanks to a sweeping restructure of the flailing business which includes 5000 redundancies and the splitting off of Qantas Domestic and International divisions.

So, what does it mean for you?

FARES

Airline expert Tim Harcourt of the UNSW Business School predicts domestic airfares may rise as fuel costs continue to bite, but says international airfares, particularly to Asia, will face downwards pressure as competition from low-cost Asian carriers heats up.

“Domestically there will be pressure due to fuel costs, although a lot of that may not affect consumers so much — a lot of it will be FIFO workers going into the Pilbara and the like,” he said.

“With the Australian dollar now compared with 10 years ago, people will export to Asia, they’ll buy online from America and they’re going to take their holidays in Thailand, not Townsville. That means more competition from low-cost airlines in Asia, so there will be pressure to bring those fares down.”

Qantas domestic routes should remain largely unchanged.

SERVICES

Mr Harcourt says despite the 5000 job cuts, services — both on the ground and in the air — may actually improve. That’s partly because Qantas staff realise Australians no longer fly with the national carrier out of patriotism.

“I’ve found the quality of service has actually improved. The staff know they need people’s custom, that people don’t automatically fly Qantas anymore,” he said.

The introduction of self check-in had actually improved the quality of service, he added. “We’re already seeing a technical change with the check-in. People who know how to check in get on with it, and if people don’t know the Qantas staff are there to troubleshoot.”

ROUTES

International routes may be cut back or moved to codesharing arrangements such as with Emirates, Mr Harcourt said. Domestically, he predicts routes will largely remain although Qantas may reduce frequency.

“They’re going to focus on their core international routes where they’re profitable, to the US and so on, but I imagine they’re not going to be expanding,” he said.

“Domestically they carry a big burden that no commercial airline in any other country would do — flying to the Pilbara, Kununurra — that’s where people should value Qantas. They do it out of patriotism.”

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Originally published as Qantas results: What does it mean for you?