Qantas Slashes Domestic Capacity as Jetstar Boss Announces Departure

DALLAS - Australian flag-carrier Qantas (QF) has announced its intention to slash domestic flight capacity until March 2023. The airline is blaming cost pressures from record-high oil prices, which have added over AU$1bn (US$690bn) to its fuel bill.

Speaking at a press conference, QF CEO Alan Joyce said, "The reality is we're taking capacity out because of oil prices. We buy over $4 billion in fuel every year. Our fuel bill has gone through the roof. So that has to come through in terms of the economics of the business."

QF switched from Boeing to Airbus for its domestic fleet renewal, announced in December 2021. Photo: Qantas.

Impact on Passengers

Routes with greater capacity, such as those between Sydney, Melbourne, and Brisbane, will be cut by at least 10%. This, it hopes, will have minimum impact on passengers.

International capacity, for now, remains unchanged. Here the airline hopes to be operating approximately 70% of its pre-pandemic capacity by October 2022, rising to 90% around June 2023. Full international recovery is slated for mid-2023.

Jetstar operates a 58-strong fleet of Airbus A320 aircraft. Photo: Noah Pitkin/Airways

Jetstar Departure

Meanwhile, Qantas' low-cost subsidiary Jetstar (JQ) is looking for a new CEO after Gareth Evans announced he is stepping down from the role after 23 years within the airline group.

Evans exit comes as a shock to the industry as many had tipped him to replace Joyce as Qantas CEO. He leaves behind a substantial legacy. During his time at Qantas, he helped oversee the introduction of its 787-9 Dreamliners. And in his five-year JQ tenure, Evans guided the airline through the coronavirus pandemic.

Alan Joyce paid tribute to Gareth Evans, saying, "Gareth has been a superb leader and member of the senior executive team for many years. He's given an incredible amount to the organization in several key roles, from his time as CFO through major restructuring and most recently as Jetstar CEO as we navigated Covid-19. When he leaves next year, it will be with our sincere thanks and best wishes."

Evans' exit comes as a shock to the industry as many had tipped him to replace Joyce as Qantas CEO. Photo: Qantas.

Internal Recruitment Drive

Despite stepping down from JQ in December this year, Evans "will remain with the group into next year to work on key projects before leaving during 2023." A spokesperson for QF said that they are now carrying out an internal recruitment process to fill the role, "with a handover of several months expected."

In a market update, Qantas announced that it had reduced its net debt to A$4 billion ($2.8 billion) by 30 June. This has been helped by the strong rebound in travel demand. Despite expecting to still report a loss for the current financial year, the carrier is confident of returning to profit next year.

This comes as the airline launched its first non-stop flight between Australia and Italy on June 22. The new route from Perth (PER) to Rome (FCO) is flown by one of the carriers, 236-seat 787-9 Dreamliners.

Featured Image: Qantas Boeing 737-800 (VH-VZF). Photo: Noah Pitkin/Airways