We have to change or perish, says Qantas chief

Qantas boss Alan Joyce has spelled out the reasons why Qantas needs to change to avoid the collapse of its international business.

Joyce said Qantas International is “a steadily fading business, suffering big financial losses and a substantial decline in market share”.

He sad the issues were neither cyclical nor temporary.

“Qantas International faces serious structural challenges, 
to do with the progressive deregulation of our market at home, the influx of competition here and abroad, and our high cost base.

“Right now 82 out of every 100 people flying out of Australia are choosing to fly with an airline other than Qantas, not including Jetstar,” Joyce said.

“Competitors are piling in, many with substantial foreign government backing, meaning we have some of the fastest capacity growth of any market in the world.”

He said a large numbers of Qantas routes, primarily to Asia and Europe, were loss making, “with no improvement in sight”.

“Our share of the Asian international market has collapsed to 14%. 
Our profitable international routes are not sufficient to make up the shortfall. And our cost base is around 20% higher than our key competitors.”

Joyce said Qantas International was absorbing large amounts of capital that could arguably be better invested in profitable, growing parts of our business.

“We don’t have the option of pretending that things will change if we stay the same. They won’t.

“To do nothing, or tinker around the edges, would only guarantee the end of Qantas International in our home Australian market.

“That would be a tragedy,” Joyce said.