Boeing and the Qantas Group announced the carrier has selected the 787 Dreamliner family to modernise its widebody fleet with an order for four 787-9 and eight 787-10 airplanes. With enhanced fuel efficiency and environmental performance, the 787 Dreamliner is pivotal to Qantas’ global growth strategy to reduce its carbon emissions over the next decade and beyond.
“This is another multi-billion-dollar investment in the national carrier, and it’s great news for our customers and our people,” said Alan Joyce, Qantas Group CEO. “The 787 and the GE engines fitted to them, are thoroughly proven and extremely capable.”
The 787 enables Qantas to meet its near- and long-term sustainability goals, reducing fuel use and emissions by up to 25% and featuring quieter engines compared to previous generation jets. The airplanes are also capable of flying on a blend of Sustainable Aviation Fuel (SAF), an important pathway to reducing emissions. The new order is part of Qantas’ major fleet renewal program that is significantly increasing the carrier’s overall fuel efficiency each year.
“With its market-leading environmental performance, the 787 Dreamliner is central to Qantas’ unwavering commitment to operate one of the most sustainable and capable fleets in the airline industry,” said Stan Deal, president and CEO of Boeing Commercial Airplanes. “Both the 787-9 and 787-10 offer enhanced efficiency, flexibility and passenger comfort to connect Australia and destinations around the world.”
Capable of flying an expansive international route network, the operating economics of the 787 family enables Qantas to open new routes and add more flights to its existing network. The 787-9 can fly up to 7,565 nautical miles (14,010 km) connecting Australiato North America and Europe. The larger 787-10 with a range of 6,330 nautical miles (11,730 km), will enable the airline to serve many popular international and regional routes. Currently, Qantas has a fleet of 14 787-9 jets.
Qantas Group posts first full-year profit since COVID
The Qantas Group has posted its first full year statutory profit since FY19 and will share the benefits by rewarding employees, reinvesting for customers and returning capital to shareholders. For FY23, the Group achieved an Underlying Profit Before Tax of $2.47 billion and a Statutory After Tax Profit of $1.74 billion. This compares with $7 billion in accumulated statutory losses over three prior years. Underpinning the profit was completion of the Group’s $1 billion recovery program (launched in the first year of those losses), a 132 per cent increase in flying compared with FY22 and strong travel demand driving significantly higher revenue.
Operational performance improved considerably during the year after a challenging ramp up, with Qantas achieving the best on-time performance of the major domestic airlines for 11 months out of 12 and Jetstar returning to pre-COVID levels. Customer satisfaction, while not back to pre-COVID levels, has also improved in line with operational performance.
Normalising of international capacity and the unwinding of inefficiencies from the return to flying will help put downward pressure on fares and strengthen financial performance. This strength enables the Group to keep investing heavily in customer experience, including firm orders for a further 24 Boeing and Airbus widebody aircraft from FY27 onwards to replace Qantas’ A330 fleet, plus purchase right options for future renewal and growth.
Qantas Group CEO Alan Joyce said: “These results show a substantial turnaround in both our finances and service over the past year. Flight delays and cancellations have largely returned to pre-COVID levels and we’ve shifted from heavy losses to a strong profit and pipeline of investment worth billions of dollars. We safely flew almost 70 billion more seat kilometres and doubled the number of people we carried to 46 million compared to the year before. Travel demand is incredibly robust and we’ve taken delivery of more aircraft and opened up new routes to help meet it. The data shows customer satisfaction has improved significantly and we’re constantly working to deliver great travel experiences. It’s because we’re in a strong financial position that we’re able to invest in new aircraft, new destinations and new training facilities – all things that will make us better in the future. Our people have done a superb job under very difficult circumstances. Today’s result means more than 21,000 non-executive staff will receive up to $6,000 worth of Qantas shares as a thank you for their part in our recovery, plus another $500 staff travel credit. This is in addition to a $5,000 cash payment to eligible employees as new enterprise agreements are finalised.”
Group Domestic, consisting of Qantas, QantasLink and Jetstar, increased flying to 103 per cent of pre-COVID levels by the end of the second half of FY23. This was supported by strong travel demand from leisure and business travel, helping to deliver Underlying EBIT of $1.5 billion. The combination of Qantas’ network, frequency, lounges, loyalty program and inclusions like inflight Wi-Fi helped it retain its share of corporate and small business travel, while Jetstar continued to offer millions of low fares to popular leisure destinations. Demand from the resources sector also drove significant revenue.
The return to service of seven refurbished Airbus A380s during the year, plus delivery of two new Boeing 787s and eight new A321LRs, helped Group International (Qantas and Jetstar) increase flying from 54 per cent of pre-COVID levels to 81 per cent over the period.
This activity combined with strong demand, particularly in premium cabins, helped drive Underlying EBIT of $1.1 billion. Passenger loads averaged above 85 per cent for both Qantas and Jetstar.
Qantas Freight made a significant contribution even as market yields continued to normalise, delivering an additional ~$150 million[6] in structural earnings growth that is expected to be maintained through a permanent increase in e-commerce and efficiencies from fleet renewal.
The Group has entered FY24 with a very strong balance sheet, $1 billion in reoccurring cost benefits from its recovery program, and strong trading conditions as consumers continue to prioritise travel.
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