In a bold move to address customer concerns and elevate service quality, the Qantas Group is investing an additional AU$80 million into customer improvements for FY24, supplementing the previously allocated AU$150 million. This investment will be funded directly from profits and will tackle various customer ‘pain points.' Initiatives include bolstering contact centre resources and training, expanding seat availability for Frequent Flyer points redemption, enhancing support during operational disruptions, reviewing long-standing policies for fairness and refining in-flight catering quality. The Group is also accelerating ongoing projects, such as the re-platforming of the Qantas app, with more details to follow in the coming weeks.
The Qantas Group reports a continued robust travel demand, with the first quarter of FY24 mirroring the strong conditions of the previous quarter in FY23. Over the September/October school holidays and football finals period, Qantas and Jetstar anticipate transporting more than 4 million passengers on nearly 35,000 domestic and international flights—a substantial increase compared to the 3.7 million passengers and 28,000 flights during the same period last year. Survey data confirms that travel remains the top spending priority for Qantas Frequent Flyers in the next six months, demonstrating unwavering customer support for Qantas and Jetstar.
Fuel prices have surged by approximately 30% since May 2023, including a 10% spike in August. This increase is attributed to higher oil prices, elevated refiner margins and a weaker Australian dollar. The Group anticipates that, if sustained, this will result in a AU$200 million rise in its 1H24 fuel expenditure to AU$2.8 billion after hedging, with an additional AU$50 million impact due to non-fuel foreign exchange fluctuations. While the Group is currently absorbing these heightened costs, it will closely monitor fuel prices in the coming weeks and consider adjustments that strike a balance between recovering higher costs and maintaining affordable travel in an environment where fares are already elevated.
Thanks to new aircraft deliveries and wet-leasing agreements, Qantas and Jetstar plan to increase international capacity by 12 percentage points by the end of the calendar year, equating to nearly 50 extra weekly flights. This expansion includes the resumption of Qantas' Sydney-Shanghai services, the launch of two new routes, Brisbane-Wellington and Brisbane-Honiara, and a new Jetstar route from Brisbane to Tokyo. Both international and domestic capacity for 1H24 remains in line with late August 2023 estimates.
The Qantas Group maintains a robust financial position, characterised by healthy debt levels and consistently strong revenue streams. The previously announced on-market share buyback of up to AU$500 million, initiated on August 24, 2023, is already 10% completed. Shareholder approval will be sought at the upcoming Qantas AGM to expand the headroom for future share buybacks in accordance with the financial framework. (£1.00 = AU$1.90 at time of publication.)
