Qantas chief executive Alan Joyce says demand for travel is still running high but more airline capacity should push down air fares.
Joyce, in Auckland for the launch of Qantas’ non-stop Auckland flight to New York, told Newstalk ZB’s Mike Hosking that his airline had bounced back from Covid and was now making record profits.
“We’re seeing a massive pent-up demand. Our research in Australia says [there is] twice the demand for international travel and domestic travel than there was before Covid.”
Asked if the surge in record profits dovetailed with high airfares and a poor travel experience, Joyce said:
“I think it’s getting better though. We’re seeing that more and more capacity is being added all the time and as that capacity is being added, airfares are coming down and the service levels are getting better.”
But increased fees and charges were feeding into airfares.
Australia will boost the Passenger Movement Charge (PMC) by A$10 to A$70. Last week Auckland Airport announced aeronautical fees for airlines would more than double for some aircraft within the next five years.
While Joyce said he accepted other businesses and agencies faced inflation, there was a risk increased charges could slow the return to airfares at “normal levels”.
But he said it was important to get airfares back to a normal level as demand comes back down.
He warned that New Zealanders would be hit hardest by the PMC increase as it made up a higher proportion of transtasman fares that were lower than bigger international long-haul fares.
The Qantas group, which includes Jetstar, would be back to its pre-Covid capacity early next year.
Joyce finishes at Qantas later this year after 15 years at the top which he described as a “roller coaster ride”.
One of his biggest legacies would be Project Sunrise, where aircraft would fly non-stop from Sydney or Melbourne to London or New York using specially configured Airbus A350-1000 planes.
Joyce said Project Sunrise flights would be up to 21 hours in duration and overcome “the tyranny of distance”.
Qantas is going to reveal more about the flights in New York later this week but Joyce told ZB that there was “overwhelming” demand for ultra-long-haul non-stop travel.
It also allowed the airline to compete harder with the big Middle Eastern carriers.
The airline’s inaugural Sydney-Auckland-New York flight takes off tomorrow.
On the 14,200km Auckland New York leg, Qantas will compete directly with Air New Zealand. Both airlines will fly three times a week until October when Qantas will turn up the pressure even further with a fourth weekly flight.
Joyce said Qantas will with the New York service be flying three of the five longest routes in the world.
It also flies between Dallas Fort-Worth and Melbourne and between Perth and London. The linking of Australia and Europe was very popular with travellers.
Qantas has been planning the New York route for two years, closely monitoring the operational aspects of Air NZ on the service. It will use a 236-seat Dreamliner on the route, a plane specially configured for ultra-long-haul flying.
Departure board
Qantas QF3/QF4 (from June 14)
Air New Zealand NZ1/NZ2