Qantas CEO Alan Joyce said he expected the airline to return to pre-Covid capacity by 2024.
“We are confident that we will return … 100% of pre-Covid international capacity, and more than 100% for domestic capacity,” Joyce said for the 2024 financial year.
″[There is] very strong demand in leisure, in business … in corporate,” he told CNBC, adding that the pent-up demand will continue for some time.
Qantas reported record half-year profits for the six months ending December 2022, but shares still closed 6.8% lower on Thursday.
The flagship carrier recorded a pre-tax profit of $1.43 billion Australian dollars ($975.2 million) in the half year ended December 31.
A Qantas Airways Airbus A330-200 prepares for departure at Los Angeles International Airport on July 30, 2022 in Los Angeles, California.
Aaronp / bauer-griffin | Image Gc | Getty Images
In its earnings release, the airline reported that the main drivers for the result were continued travel demand, higher yields and cost improvements from the Group’s A$1 billion recovery program which is nearing completion.
The road to 100% pre-Covid capacity will not be without turbulence, the CEO said.
The biggest roadblock for Qantas is the supply chain associated with the aircraft, Joyce said.
“We’ve got three new 787s coming in the next few months, two years late,” he said. This is in addition to the time required to reactivate the A380 fleet, which he says requires a lot of maintenance.
“Every maintenance facility around the world is very full as every airline tries to get their planes up and running.”
In China
The CEO said Qantas will benefit from the return of the Chinese, as Beijing moves away from its zero-Covid policy.
“China is very important to Australia in general because the biggest international visitors to Australia are the Chinese,” Joyce said.
“We think that will be good for our economy here, which has an impact on Qantas.”
According to JPMorgan, China accounted for 15.3% of Australia’s inbound tourism in 2019 – before the pandemic.
Chinese arrivals to Australia totaled 1.43 million in 2019, with Chinese tourists spending a total of A$12.4 billion, official data showed.
Qantas is currently rebuilding operations in Hong Kong, but limited ground handling capacity means the carrier cannot expand as quickly as it would like, its CEO said.