Cost of living worries left at home with record demand for premium travel, says Qantas

Qantas chief executive Vanessa Hudson says premium-class bookings are at record levels as air travel brushes off a global cost-of-living crisis.

Demand for seats in the airline’s first, business and premium-economy class cabins is “stronger than ever,” Ms Hudson said at the Macquarie Australia Conference in Sydney on Wednesday. Overall demand on Qantas’s domestic and international network “continues to be really good”, she said.

Qantas’s international capacity should also return to pre-COVID levels this month, Ms Husdon said. Premium economy is the industry’s most profitable class of travel, she added.

Ms Hudson struck a positive, though conciliatory, tone. After taking the top job in September, she’s spent much of her time cleaning up the reputational mess left by her predecessor Alan Joyce.

This week, she announced a $120 million settlement with the Australia Competition and Consumer Commission after it sold tickets on thousands of phantom flights.

“This is not job done,” Ms Hudson said, referring to the work required to repair the airline’s brand.

Qantas must ensure that recent improvements in flight reliability are consistently delivered if the airline is to win back disaffected customers, she said. To justify the high fares Qantas charges, flights must depart and arrive on time, and those better reliability levels should also feed into higher earnings, she said.

“When your network is operating to schedule, you’ve got the most efficient service levels,” she said. When flights run on time, the airline can avoid the extra costs of shuffling around crews and planes.

As Qantas’s former chief financial officer, Hudson has also injected extra funds into in-flight catering and call centre staffing. Last month she overhauled the frequent flyer business to make it easier for passengers to redeem air miles for flights.

The revamp of the loyalty division will deliver a boost to net income within 12 months, Ms Hudson said.

Bloomberg