The Qantas Group released its detailed strategy to 2030 at its first Investor Strategy Day since the pandemic. The strategy focussed on long-term plans across key categories of customer experience, sustainability and its people.
The Group also disclosed plans for maintaining FY24 margin targets across its flying businesses and announced new earning targets through to FY30 for Qantas Loyalty and Project Sunrise.
On the financial front Qantas has outlined significant profit margin eyeing the introduction of the Airbus A350 and the evolution of the ultra-long-haul Project Sunrise operations. The Group estimates that the two factors will add together and help garner a $260 million in EBIT in the first full year when the twelve A350s are operational.
Qantas had international margins of around 5% which are projected to increase to more than 8% in the twelve months ending June 30 2024. This coupled with an increased return from the freight business, Qantas forecasts the international margins to reach between 10% and 12%, more than doubling pre-COVID margins.
Speaking about the technological advancement and how Qantas has evolved with time, Alan Joyce, Chief Executive, Qantas said: “This is a structurally different business than it was before COVID, operating in markets that have also changed. We’re very well placed to take advantage of the opportunities that creates and the detail we’ve released today shows our strategy to do it.
“New technology is central to our plan and the next-generation aircraft that have started arriving will transform our network over the next few years. We’ll be able to serve our customers better, reduce our cost base through lower running costs and carve out some new competitive advantages.”
Qantas is banking on its fleet renewal program with a new aircraft set to arrive on average every three weeks for the next few years. The airline believes that new generation aircraft like the Airbus A350, A220 and A321LR/XLR and Boeing 787 will transform the operating economics of both airlines and open up new routes that may only be marginal today.
Pointing to its progress the airline said it received more than 160,000 applications for 7,000 jobs and that employee attrition rates have declined from a peak of 18% in December 2021 to an average of 5% across the group, going as low as 2% for pilots.
“Our revenue projections and track record for ongoing transformation show we can invest heavily in people and technology at the same time as generating strong returns for shareholders. That’s exactly the kind of national carrier we want to be,” added Joyce.
Group CFO and CEO-designate, Vanessa Hudson, said: “We’ve been clear on the significant level of investment in the pipeline and today we’ve given some detail on the returns we expect from it. We’re confident in reaching our FY24 margin targets and we’ve set some ambitious but achievable earnings goals beyond that, because we think ambition is key to long-term performance.”