Qantas’ continued shift away from Europe and into the Asia market — and other changes in its global business, are expected to boost its international earnings as a result, its CEO Alan Joyce told CNBC on Thursday.
Speaking on CNBC’s “Squawk Box,” he said: “We have been re-balancing, for a few years, our capacity away from the European market into the Asian markets – which we are seeing phenomenal growth. We think that will continue.”
The airline, Australia’s largest, currently holds an 8 percent capacity in the European market, down from 30 percent 10 years ago, and in Asia it has gone from 30 percent to over 50 percent, Joyce said.
By the end of March, Qantas will relocate its A380s back to Singapore, which will result in an 84 percent growth in capacity there, he added.
The airline is also adding new routes to expand its existing network.
“We are adding Melbourne to San Francisco, later on in the year we are starting Brisbane to LA and New York. And we are looking at new routes out of Brisbane to places like Chicago, Seattle and Dallas, so there are significant changes to the network,” Joyce said.
Qantas’ partnership with Emirates has also undergone an interim renewal for another five years, which is set to boost cooperation on flight routes and ticket prices.
“”We have huge changes coming in international next year … The combination of all that should give us a significant uplift in earnings for financial year (2019) on Qantas’ international business,” he concluded.
The CEO also advocated for a “competitive tax system” in Australia, pointing out that it is “important for investment into the economy, growth in the economy, growth in jobs, and growth in wages.”
“And if that doesn’t happen because we are not competitive from a tax position, that’s not good for our economy and that’s not good for Qantas. We think it’s a real future risk to the economy if this is not corrected,” he said.