Qantas to reap revenue windfall from Australia Post freight deal

The five-year international freight deal adds to a $500m contract for Australia Post’s domestic airmail.

A Qantas Boeing 767-300 freighter is loaded with cargo at Sydney airport.

Qantas’s freight division has sec­ured a multi-million-dollar contract to handle Australia Post’s international mail business that carries some 12,000 tonnes of parcels each year.

The five-year deal builds on the $500 million contract that Qantas signed in June last year for Australia Post’s domestic airmail deliveries, making it the largest freight contract in the nation.

As part of the domestic deal, Qantas has established a dedicated sub-fleet of six freighter aircraft — featuring Australia Post’s StarTrack-branded livery. The fleet began flying in July.

The international deal will not see Qantas establish a separate international freight fleet for Australia Post but the airline will carry parcels and mail in the bellies of the group’s aeroplanes as well as its existing international freighters that include a Boeing 767-300F and two 747-400Fs.

Qantas’s dedicated inter­national freight fleet currently flies to China, Thailand, New Zealand, the US and Hong Kong, but with planes from its wider group included, that network expands to 50 destinations with major freight lanes, and 1500 inter­national flights a week.

Qantas staff who oversee the Australia Post domestic contract will also take charge of the international deal.

“We have a well-established relationship with the Australia Post Group and the growing international parcel business makes this a substantial contract to secure,” said Gareth Evans, head of Qantas International and Freight. “We have transformed Qantas Freight to deliver flexible and efficient operations for the changing needs of our customers.

“This partnership sees the Australia Post Group and Qantas Freight well positioned to support the growing eCommerce industry which relies on airfreight to achieve express delivery of its steadily increasing volumes of international packages and parcels.” The award of the international Australia Post deal will help Qantas boost earnings at its freight business, which suffered severe revenue declines in the last financial year as global demand for freight softened.

The airline’s freight business had a 44 per cent drop in earnings last financial year to $64m as revenue fell from $936m to $850m.