Qantas sees domestic market ‘well balanced’

Aviation

Qantas has attributed a strong performance from its domestic network to having its capacity aligned with demand, and has characterised the market as well balanced.

The Oneworld carrier’s mainline domestic segment produced record underlying earnings of A$453 million for the half-year to the end of December 2018, as unit revenue grew 7.5%.

Capacity, meanwhile, fell 2.1%, which it says reflected discipline, as well as higher pilot training requirements over the half.

“Broadly, the domestic market remains well balanced,” commented group chief executive Alan Joyce.

“Where there are opportunities, we’ll grow into them. The resources sector is a good example; we’re increasing our capacity within Western Australia by almost 10% because of the demand we’re seeing.”

That echoed similar sentiments by Virgin Australia chief executive John Borghetti, who said in the previous week that the domestic market was “in pretty good shape”, but noted that there were broader geopolitical uncertainties that prevented the airline from issuing profit guidance.

Qantas adds that it expects capacity over the six months to 30 June to remain flat over the previous corresponding period, with unit revenue set to continue growing.

“We are mindful of potential signs of weakness in the broader economy and we’re always adjusting capacity to meet demand in individual markets – but overall revenue and yield indicators remain positive,” Joyce adds.