Qantas 2014 Annual Report Download - page 10

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The aviation industry of 2014 is very different
from that of 10 or even five years ago.
Fuel prices were around US$60 per barrel
in 2005; today they are consistently above
US$120 per barrel.
Despite a subdued global economy since the
Global Financial Crisis, international airline
capacity has increased rapidly – especially
in the Asia-Pacific region.
Australia is at the centre of this trend,
which has been driven largely by state-
owned airlines from the Middle East and
East Asia, as well as low-cost carriers.
Between 2008/2009 and 2013/2014, Qantas’
international competitors increased
capacity into Australia by 44 per cent,
compared with global growth of 29 per cent.
In 2013/2014, competitor capacity growth
was 9.5 per cent.
In the domestic market, capacity growth
has exceeded demand growth for two
consecutive years, resulting in a significantly
reduced profit pool.
The combination of these factors brought
about a uniquely challenging set of market
conditions in Australian aviation.
It was in response to these challenges
that Qantas announced an accelerated
and expanded transformation program in
December 2013.
A CHANGING
WORLD
$50
$75
$100
$125
$150
$175
$200
Jun 14
Jan 14
Jul 13
Jan 13
Jul 12
Jan 12
Jul 11
Jan 11
Jul 10
Jan 10
Jul 09
Jan 09
Jul 08
Jan 08
Jul 07
Jan 07
Jul 06
Jan 06
Jul 05
Jan 05
Singapore Kero AUD/bbl
Fuel prices spiked before the
Global Financial Crisis and
recovered quickly afterwards,
rising steadily from early 2009.
FUEL PRICE INCREASE
08
QANTAS ANNUAL REPORT 2014