Australia not big enough for more domestic airlines, says Qantas boss Vanessa Hudson

Qantas boss Vanessa Hudson says history proves Australia cannot support more than three airlines and regulation should back existing players.

Qantas chief executive Vanessa Hudson says the decision to go with Airbus was not because of the issues with Boeing. Picture: Getty Images

Qantas boss Vanessa Hudson says history proved three airlines struggle to survive in Australia and government regulation of the industry should focus on the sustainability of existing operators.

Speaking in Perth at the launch of the airline’s new Perth-Paris route which Ms Hudson said she hoped would prove as profitable as the popular Perth-London hop, she expressed her sadness at Bonza’s demise but warned Australia’s population couldn’t support “more players”.

“If you think about why three airlines really struggle it’s a number of things – our population; the US has 250 million people, we have 26 million and spread between the economics of being a viable airline, it’s incredibly challenging because it’s capital intensive,” Ms Hudson said.

“The next biggest challenge is decarbonisation, so that is significant and we believe no one can be winners or losers from decarbonisation, everyone should be doing it. And I don’t think there’s sufficient volume to sustainably support a significant growth in the number of players but we want to grow.”

With the federal government’s white paper on aviation due for release soon, Ms Hudson said any further regulation needed to ensure the industry was sustainable.

“I think that’s a really important consideration for governments thinking about regulation,” she said. “We are an island nation, our economy relies on domestic aviation and the role that we play as a national carrier. We want our airlines, and Virgin and Rex, we want them to be sustainable, and to be sustainable they’ve got to be making a certain amount of revenue to invest. We don’t want a weak aviation market.”

After years of limited capital spending, Qantas was now pouring billions of dollars into its fleet renewal in the form of new A350s, more 787s and new narrow body jets including A321s and A220s.

A350-1000s configured especially for Qantas’s ultra-long range Project Sunrise flights, with four cabin classes and three fuel tanks, were due to arrive from mid-2026. Another dozen A350s were earmarked to help replace ageing A330s and eventually A380s, with a product similar to the Boeing 787-9s currently used on international flights.

Ms Hudson said she was “feeling confident” in the decision to go with Airbus rather than Boeing for the bulk of its fleet order, with the European manufacturer largely unbothered by the sorts of production issues that have plagued their US rival in recent years.

“We didn’t make the decision to go with Airbus because of (the Boeing quality assurance problems) but because of the way things have played out, I’m feeling much more confident about our position,” she said.

“When we made the deal with Airbus we said we wanted to be viewed as a really strategic customer, so that gives us the flexibility I’ve been talking about. If they need to change their order book we get impacted less than what we see from other airlines.”

With greater fuel efficiency and longer range, the new aircraft will help Qantas add more marathon routes such as Perth-Paris, at a tad under 17½ hours’ duration.

Ms Hudson named Chicago as top of her wish list, with the route from Brisbane previously due to start in 2020 only to be thwarted by Covid.

“I’d like to see us in more direct points in the US, (so) Chicago, southern parts of the US, northern parts of South America, more points into Europe. We will be ambitious,” she said, adding Qantas was prepared to try new routes and axe them if they failed to make money.

“Again it comes back to this trend of customers wanting to fly point to point, and given our product, we’re investing more in premium cabins because we see that’s where our customers want to be.”

* The reporter travelled to Paris as a guest of Qantas

Originally published as Australia not big enough for more domestic airlines, says Qantas boss Vanessa Hudson