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Joyce tells Perth why Qantas International has departed

May 2, 2014 Aviation, Headline News No Comments Email Email

egtmedia59Qantas chief executive Alan Joyce had his work cut out in Perth this week when he addressed the Chamber of Commerce and Industry of Western Australia. Perth is badly served when it comes to international Qantas flights. The airline decided earlier this year to axe its year-round Perth to Singapore route, leaving Perth with no regular international Qantas services.

Joyce told his audience that the reason Qantas no longer provided such year-round international services from Perth was because it couldn’t operate them profitably.

“As I said here last year, Qantas is in the midst of its biggest transformation since it was privatised,” Joyce told his audience.

“In February we accelerated that transformation. This was not a choice that we made lightly.  But it’s essential for Qantas’ future.”Web-banner-300-250

Instead, Perth residents must fly Emirates – or Jetstar. Joyce reminded his audience that the airline offered connections to 58 international destinations from Perth through Emirates, Jetstar and various other oneworld alliance partners.

The Qantas chief pledged that the airline would continue to offer seasonal services on the Perth-Singapore and Perth-Auckland routes. He reiterated that Qantas would continue to defend its 65% domestic market share.

“Unfortunately we can’t insulate WA from the need for hard decisions,” he said.

“I recognise that Perth has been affected by the withdrawal of some Qantas International routes – routes that were unprofitable. But this transformation is not just about tomorrow, or next week, or next year. It is about building a Qantas that can compete and succeed for another 94 years.”

The airline was turning itself around, removing AUD 2 billion of costs over the next three years, he said.

Joyce blamed the drastic measures being undertaken (which involve 5000 looming job losses at the airline) on a big surge of international airline capacity hitting Australia.

“Since 2009, we’ve seen growth of 46% in contrast to a global growth rate of less than half that,” he said. He also hit out once again at the “uneven playing field” against Virgin Australia domestically, and record fuel prices.

Joyce reminded his audience that travellers from Perth would benefit from the Qantas decision to upgrade its A330 fleet interiors from the end of this year. The A330s will fly between Perth and the Australian east coast. Business class will feature lie-flat beds.

Some critics interpreted Joyce’s speech as effectively telling business leaders in Perth that it was somehow their fault that Qantas was no longer a growing participant in international air services between Australia and the world.

Aviation reporter Ben Sandilands pointed out in his blog on Crikey.com.au, that, quite apart from fuel prices and Virgin Australia, Qantas had been “seriously weakened by a Jetstar franchise that in 2014 has not come close to delivering on any of the hype with which is was launched with Mr Joyce its founding CEO in 2004.

“The decline has been accentuated by grandiose announcements of a low-cost airline with Air Asia, which hasn’t been heard of since, and the low-cost but premium single aisle carrier (Red Q) that was to be based somewhere in Asia as a minority owned puppet enterprise to cross-subsidise the main Qantas international starting late in 2012!” Sandilands wrote.

A few of those ghosts from the past may have flitted through the minds of Joyce’s Perth audience. Especially if they had been wondering why it has become so hard to fly Qantas International out of Perth.

Written by : Peter Needham

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