Qantas Unveils New International Strategy

Qantas Airways is rolling out its new international strategy, with a heavy emphasis on capitalizing on emerging Asian markets. Australia’s national airline said its new five-year strategy includes cutting 1,000 jobs and setting up several joint ventures in Asia.

With the new strategy came the announcement that the Qantas Group will invest A$500 million to launch a premium airline at a yet-undisclosed hub as well as Jetstar Japan, a new airline based in Asia that will be owned with Japan Airlines and Mitsubishi. Each will hold a third share in the new company.

Jetstar Japan will commence domestic operations by the end of 2012 and expects to fly from Tokyo and Osaka, with other destinations under consideration including Sapporo, Fukuoka, and Okinawa. The airline will launch with an initial fleet of three new Airbus A320 aircraft, configured for 180 customers in a single class, growing to 24 aircraft within its first few years.

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Part of the new strategy and expansion into Asia is to stay ahead of the competition when the airline's cost base is 20 per cent higher than key competitors. Alan Joyce said, “Qantas International takes up enormous amounts of capital, and our cost base is around 20 per cent higher than that of our key competitors. To do nothing, or tinker around the edges, is not an option.”

For the overall carrie,r twelve Airbus A380s will be in service by the end of 2011 and the first of nine Boeing 747s being reconfigured with A380-standard cabins will commence flying within the next three months.The acquisition of between 106 and 110 Airbus A320 aircraft to support the airline’s capacity growth and expansion into new markets, including aircraft for Jetstar Japan and the new premium Asia-based airline.

The new strategy includes the redundancy of 1,000 jobs, and the retirement of four Boeing 747s and the delay of the delivery of its final six Airbus A380 superjumbos for up to six years. Qantas will also ''eliminate unprofitable'' flights from Hong Kong and Bangkok to London.

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