Airline declines to predict impact of new carry-on luggage charge on Jetstar revenue or ticket sales, saying it is offering customers ‘choice’
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Qantas could increase ticket prices and plans to expand add-on fees at its low-budget carrier Jetstar, after the company said fuel costs contributed to its lowest pre-tax profits in four years.
After delivering the airline’s annual results on Thursday, the Qantas chief executive, Vanessa Hudson, said the company could push for more revenue because passenger demand remained strong despite cost-of-living pressures.
“We are not saying that everything that can be done has been done, because we’re going to continue to drive where we see demand,” Hudson told analysts, who asked if further fare increases were planned.
“We’re going to continue to push to maximise revenue and clearly, obviously, maximise earnings.”
Qantas recorded a sharp decline in its pre-tax underlying profit – at $2.06bn in the year to 30 June – with higher fuel prices linked to the Iran conflict denting the airline’s profitability.
Those higher fuel costs were disproportionately felt by its older A380 fleet.
Qantas said it would start retiring the models – primarily used for long-haul international flights – in 2028, rather than 2032 as planned, as it expected maintenance costs and disruptions to rise.
The company said it expects to buy up to 20 additional planes from 2030 as it continues its fleet renewal program.
Hudson said Airbus A350-1000s and Boeing 787 Dreamliners were being considered. But there were no plans to order more of the ultra-long haul A350s like the ones to be used for Qantas’ planned Project Sunrise Sydney-London route.
While airlines tend to hedge against rising fuel costs – a financial strategy to protect against volatile prices – it only offers partial protection. They also typically increase air fares and reduce seat capacity on less popular routes to maximise profits.
Qantas’s annual accounts show that while its international routes are less profitable than they used to be, its Jetstar business remains a strong revenue earner and is at the forefront of an attempt to make the airline more profitable.
Last month, Jetstar announced it would charge fees to put carry-on luggage in overhead lockers, in a controversial move that was widely criticised by consumer advocates.
