Air Transport World

Qantas changing course to capture new growth possibilities.

Qantas changing course to capture new growth possibilities

For most of its 65 year history Qantas, Australia's national flag carrier, could be counted upon for certain unique characteristics. At least in modern times it would have the longest average passenger trip, usually the longest average flight lengths, would be a conservative participant in IATA's ways of doing things in fare and rate matters, and would be recognized by its peers as one of the finest airline technical establishments in the world. With the last item nothing has changed, Qantas still is. With the first item Qantas still is, but even this is undergoing gradual change. With everything else Qantas is changing as it faces new challenges both at home and out in the international marketplace where it must make a living.

Qantas' general performance in the 1980s has run along the same general lines as the rest of the world's airlines. It suffered through the rough times of the early 1980s as the fuel crisis scuttled the world economy. Qantas suffered losses in its fiscal years 1980 through March 31, 1983. Then as the world economy began to recover in 1983, Qantas, like many other major international airlines, began to enjoy profits. It did again in its fiscal year ending March 31, 1985 when it reported a A$62.3 million ($U.S.43.6 million) profit from its airline operations.

Financial results for the 1986 fiscal year were not available at presstime. However, Qantas Chief Executive Officer R.J. Yates said his airline will show a profit, its third in a row, but it will not be as good as the record 1985 figure. Calendar year 1985 traffic, however, was good with passenger boardings up 8.5% to 2,549,282; RPKs up 7.1% to 17.3 billion; and FTKs up 13.1% to 765.9 million.

"We began the year (FY 86) with a lot of confidence,' Yates says, "but the Australian economy is not going well.' There is a general lack of confidence in the Australian dollar, according to Yates. Inflation rate is up to 8.5% and interest rates are in the high teens. Unemployment is holding at about 7.5%, all in all not good ingredients for a booming economy.

There are other factors contributing to less than ideal economic conditions for Qantas. John F. Ward, recently appointed deputy chief executive, reports that yields are declining and costs are going up despite improvement in the fuel situation. A major item, according to Ward, was the introduction of the Boeing 767 to the fleet in 1985, a program that cost Qantas U.S.$28 million for support in that year alone.

Qantas in keeping with its reputation for technical superiority does not do things part way when introducing a new airplane. It purchased a cockpit simulator and an elaborate maintenance simulator to go along with it. The cost was apparently justified. Yates says the 767 introduction was "our easiest ever.'

Qantas bought six of the dash 200ER versions of the 767, putting the first one in service between Melbourne and Wellington, N.Z. July 30 of last year. It has just put the sixth in service.

The 767 program represents a major departure from Qantas' general operating plan going into this decade, a time when it was proud to boast of an all-Boeing 747 fleet, and all long-range aspirations. This was a little misleading since the airline actually had nearly every 747 type in the fleet with two types of engines, Pratt & Whitney JT9D-7s and Rolls-Royce RB211-524D4s. …

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