Sky’s the limit for Qantas in China

Qantas says there are big opportunities under the “open skies-style” deal between Australia and China.

Qantas chief executive Alan Joyce. Picture: Kym Smith

Qantas senior executives say there are big opportunities for the flying kangaroo in the wake of an “open skies-style” deal between Australia and China, even as Chinese airlines expand their operations here.

Qantas chief executive Alan Joyce has also added his voice to a chorus of warnings about protectionism.

Speaking on the sidelines of the International Air Transport Association’s annual general meeting in Cancun, Mexico, on Tuesday, Mr Joyce said Qantas would be the “happiest airline” if governments scrapped global traffic restrictions because the company would “just kill it”. “The fact is that’s not reality,” Mr Joyce said.

With the bilateral deals that allow airlines to operate international flights to other countries, “our government just has to make sure that we get opportunities for every opportunity that is given”, he said.

“It would be a shame if it goes backwards because we’d like more open access across the world, because we think we’ll do quite well.”

The comments come amid warnings by the Geneva-based International Air Transport Association, which represents 275 airlines including Qantas, that protectionist rhetoric from the US and other governments threatens to undermine the aviation sector.

Mr Joyce said Australia’s free-trade agreement with China held opportunities for Qantas.

“We’re actually seeing fresh produce go into China in quite significant amounts.”

He pointed to a recent freight deal Qantas had done to carry Van Milk products from Tasmania to China. He said there would also be benefits to the flag carrier’s domestic operations.

“Every Chinese visitor that comes in takes between two and three trips domestically ... What’s great about the Chinese market is it goes everywhere,” he said.

Recent figures from the Bureau of Infrastructure, Transport and Regional Economics show total passenger traffic between China and Australia was 2.48 million last year, up 28.7 per cent.

In December, the two countries signed an “open skies-style” agreement that removed capacity restrictions on services between the two countries.

Jetstar chief executive Jayne Hrdlicka said China would “continue to be a high-growth tourism opportunity” for the low-cost subsidiary. “The way the market works today we’ve got the cheapest seats and the lowest cost seats between China and Australia,” Ms Hrdlicka said. “We think it’s only positive.

“Jetstar plays quite a unique role. Qantas serves the premium market which is considerable but there is a huge and growing middle class in China.”

Qantas International boss Gareth Evans also said there were opportunities in China.

“China is just about to overtake New Zealand as the biggest inbound market into Australia, there’s huge growth out of there,” Mr Evans said. “Not all of that is profitable growth, we’ve got to be careful about how we take that opportunity.”

He said there were “deep partnerships”, pointing to the Qantas relationship with China Eastern for Shanghai services, a codeshare with China Southern to Guangzhou and partnership through the oneworld alliance with Cathay Pacific.

“We are probably the best-placed international carrier in terms of relationships with Chinese airlines in the world,” Mr Evans said. “We really do have the building blocks to be able to take advantage of the opportunity as the market grows.”

Qantas this year restarted daily flights from Sydney to Beijing after a seven-year gap, as it seeks to grow its share of the thriving Chinese travel market.

Annabel Hepworth travelled to Cancun courtesy of Virgin Australia and IATA.