What Qantas results will mean for cheaper airfares for Australians

As the pointy end of the year heats up for travellers, flyers gearing up for the summer season have one question for Australia’s national carrier.

With Qantas reporting a $1 billion profit, passengers are only asking one question: does this mean fares are going to get cheaper in the future?

Frankly, the signs aren’t promising.

Qantas’ profit is down 28 per cent year on year, and the airline says that lower fares are a factor in that.

But that doesn’t mean cheaper fares will continue in the future.

Announcing the results, Qantas CEO Vanessa Hudson flagged that if plans for better compensation for passengers due to flight delays are fully implemented, as recommended in the recent aviation white paper, then fares will go up.

“When we look to the other jurisdictions that have these broader consumer compensation schemes, we actually think that they add cost to airlines,” she said.

Following Qantas’ profits being down, what will it mean for passengers hoping to snag a bargain this year? Picture: Saeed KHAN / AFP.

Qantas Chief Executive Officer Vanessa Hudson presents Qantas Group results at the Sydney Flight Training Centre. Picture: NewsWire / John Appleyard

I suspect we’ll keep hearing that line as plans for the ombudsman are formulated.

Qantas noted in its results that domestic airfares were 8 per cent lower year-on-year while international fares were down 10 per cent.

But you need a few grains of salt before swallowing those numbers.

Firstly, both are inflation-adjusted figures, so doing direct comparisons to previous fares gets tricker.

Secondly, Qantas calculates those differences based on both Qantas and Jetstar fares.

That means $29 Jetstar sale fares from Avalon to Sydney help flatten the impact of costlier QantasLink regional flights.

Equally tellingly, this week, Qantas has been running a “Red Tail Sale”, where the cheapest fare on offer is $109.

The days of sub-$100 fares on Qantas itself are over.

Competition on domestic routes has also been massively reduced.

Bonza has gone entirely and Rex has abandoned its attempts to run flights between east coast capital cities.

ACCC analysis suggests that Rex only had 5 per cent of that route.

Following the profit announcement at Qantas’ annual results, the question remains what it will mean for flight prices. Picture: NewsWire / Andrew Henshaw

However, it’s still one less source of competitive pressure, which means less incentive for Qantas to reduce fares.

Qantas runs itself as a for-profit business for shareholders, so there’s no reason to expect its behaviour to change.

And Aussies have no plans to stop travelling, with Finder’s Consumer Sentiment Tracker showing that 35 per cent of us plan an overseas trip in the next year.

So what can you do to score better deals?

Taking advantage of sales makes sense, and you should book ahead when possible.

Last-minute fares on Qantas are never going to be super-cheap.

Building a bank of Qantas Points you can spend on reward flights is my favourite tactic to fly for less.

With less competition, what will it mean for airfare prices? Picture: NCA Newswire / Gaye Gerard

That’s going to be even more appealing next year, when Classic Plus reward seats become available on domestic flights, meaning more redemption options.

By my calculations, every Qantas Point is typically worth at least 2 cents when redeemed for a Classic Rewards flight, and as much as 8 cents if you score a seat at the pointy end.

And you don’t need to fly to earn those points.

Credit card sign up bonus offers can earn you 100,000 or more points in a single hit.

And if you shop at Woolworths and convert your Everyday Rewards points into Qantas Points, everything you eat can help you score a free flight.

Bottom line? A combination of limited competition, unpredictable fuel prices and an ultimate incentive to maximise shareholder profits mean you can’t assume Qantas fares are ever going to be super-cheap.

If you want to fly on Qantas for less, take control yourself and use points to do it.

Angus Kidman is the editor at large and points guru at Finder.