Qantas boss Vanessa Hudson says there aren’t enough passengers in Australia to sustain more than three domestic airlines given how expensive it is to provide services across the country.
Speaking in Perth for the launch of the airline’s new 17-hour non-stop service to Paris, Hudson said Australia’s aviation market differs from the rest of the world because of the country’s small population and how reliant the country is on domestic aviation.
Hudson said the demise of budget airline Bonza just one year into its operations highlights why the government needs to focus on the sustainability of the market.
Qantas boss Vanessa Hudson says plans for the world’s longest direct flights from Australia’s east coast are on track.Credit: Louise Kennerley
“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,” Hudson said.
Qantas and its rival Virgin Australia have poured millions into accommodating stranded Bonza passengers whose travel plans were dashed when it entered voluntary administration in April.
“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,” she said.
The comments come as Federal Transport Minister Catherine King gets ready to unveil the government’s long-awaited aviation white paper, which will set the policy around the industry to 2050.
Qantas is in the midst of an expensive fleet renewal ahead of launching 22-hour non-stop flights from Australia’s east coast to the US and Europe known as “Project Sunrise”, which it hopes will boost its revenues.
It’s still awaiting the delivery of 12 A350s with four cabin classes and three fuel tanks, which was pushed back at the start of this year due to the supply chain bottleneck plaguing major manufacturers Airbus and Boeing.
Hudson said she was confident in choosing to partner with Airbus. However, she said Qantas’ decision was not dictated by the recent quality assurance issues that have recently plagued Boeing.
“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.”
Qantas’ new Perth-to-Paris service is the airline’s third non-stop route to Europe from Australia’s west coast. Hudson dismissed concerns there’s not enough demand to sustain all three routes.
“It’s early days, but we’re going to promote it. What we’re seeing so far is that demand is on expectation,” she said.
This reporter travelled to Paris as a guest of Qantas.
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