The Qantas Group will spend an extra $80 million across FY24 to make improvements across various operational areas of its businesses.
Funded from profits, the additional funding comes on top of the previously announced $150 million and aims to address Qantas customer “pain points”.
In a group market update, the company said it would look to enhance contact centre resourcing and training, up Frequent Flyer rewards seats, improve support when operational issues arise, review fairness policies and upgrade its onboard catering.
With more details coming in the weeks ahead, Qantas also wants to expedite upcoming initiatives like the re-platforming of the Qantas app.
More demand, more supply
In its update, the group said trading conditions for the first quarter of FY24 were similar to the last quarter of FY23, with overall travel demand remaining “strong”.
Over the spring school holidays and football finals period, Qantas and Jetstar expect to carry more than 4 million passengers on almost 35,000 domestic and international services, compared to 3.7 million passengers on approximately 28,000 services over the same period last year.
It also reported that travel was well ahead of entertainment, renovations and homewares as a spending priority among Qantas Frequent Flyers over the next six months, citing recent data.
To help meet demand, Qantas and Jetstar will boost international capacity by 12 per cent by the end of 2024, resulting in an increase of almost 50 flights a week.
On the back of the delivery of new planes and wet-leasing arrangements, the group will resume Sydney-Shanghai services in October and commence new routes including Brisbane-Wellington and Brisbane-Honiara, along with a new Brisbane-Tokyo Jetstar service.
Fuel costs up – fares to follow?
One thing beyond the group’s control is the cost of fuel, which the company says has risen by around 30 per cent since May 2023 and 10 per cent just since August.
Driven by higher oil prices, refiner margins and a lower Aussie dollar, the spike in fuel costs is forecast to up Qantas’ 1H24 fuel bill by around $200 million.
While Qantas aims to continue to “absorb these higher costs”, if fuel costs continue upwards the company will look to “adjust its settings”, which could result in higher airfares.
“Any changes would look to balance the recovery of higher costs with the importance of affordable travel in an environment where fares are already elevated,” according the airline.
Overall, Qantas says it “remains in a very strong financial position, including its debt levels and continued strong revenue intakes”.
The September update comes after new Qantas Group CEO Vanessa Hudson issued a public apology to customers for a series of controversies that had damaged the airline’s reputation.
“I know that we have let you down in many ways and for that, I am sorry,” she said in a video message.
“We haven’t delivered the way we should have. And we’ve often been hard to deal with.
“We understand we need to earn back your trust not with what we say, but with what we do and how we behave.”
