Qantas 2009 Annual Report Download - page 29

The Qantas Group is more resilient because of its
diversification into the premium and low fares
airlines of Qantas and Jetstar, each of which now
has a strong domestic and international network.
While each airline is valuable in its own right, the
whole is even greater than the sum of its parts.
The Qantas Group’s Flying Committee
includes the CEO and CFO, the Jetstar CEO and
other senior executives. It is responsible for
managing the Group’s portfolio of flying assets
and allocating capital to achieve the highest
returns for shareholders and the best outcomes
for customers.
The current economic climate has left most
conventional full-service airlines with little
choice but to reduce capacity and shrink their
networks. With the flexibility of the Qantas
and Jetstar brands, the Qantas Group has been
able to respond to market challenges and
opportunities better than its competitors.
Japan
The cyclical Japanese market is a good example
of the two flying brands in action. When Qantas’
Japan services failed to generate adequate
returns, Jetstar was able to replace some of
Qantas’ Australia-Japan services from December
2008, and in the process overturn conventional
wisdom that the structure of the Japanese travel
market was not conducive to an international
low fares carrier with a predominantly online
booking model.
In less than six months, Jetstar significantly
increased returns on those routes and grew the
Group’s presence in Japan – with new Gold Coast-
Tokyo flying and increased services between
Sydney and Cairns to Tokyo and Osaka. An
innovative marketing campaign – featuring
Japanese megastar Becky – built strong brand
recognition in new Japanese demographics.
Prior to the H1N1 Influenza 09 outbreak of
May 2009, load factors were consistently around
80 per cent, while up to 40 per cent of bookings
were made directly with Jetstar in Japan. In the
final quarter, passenger loads from Japan were
significantly affected by the outbreak of H1N1
Influenza 09, resulting in a significant impact
on sales in May and June and around a 30 per
cent reduction in capacity on Japanese routes.
New Zealand
Across the Tasman, the two brand strategy is
delivering more choice, increased frequency,
better value and additional jobs.
In the domestic New Zealand market,
Jetstar has replaced Qantas, carrying out local
recruitment for pilots and cabin crew and
continuing to give travellers the opportunity to
link into Qantas’ and Jetstar’s Australian
domestic and international networks.
Qantas has refocused its Jetconnect
subsidiary on trans-Tasman services, offering
enhanced product and greater frequency with
three new generation B737-800s to be delivered
by the end of October 2009 and another three
in early 2011. The new aircraft is styled by Marc
Newson with in-seat video monitors for every
passenger. Qantas now operates more than
140 services each week between Australia
and Auckland, Christchurch, Queenstown
and Wellington.
Two Brands
Revenue Passenger Kilometres
2008/09
Qantas International
Qantas Domestic
Jetstar International
Jetstar Domestic
55%
27%
9%
9%
In May 2009, Jetstar was
selected as one of the 100 Best
Brands in Japan in the
‘Breakthrough Advertising’
category – the fi rst time an
Australian company has been
recognised in these awards.
27 Qantas Annual Report 2009