Singapore Airshow 2018

Qantas won't ditch Singapore a second time, says its chief

More than just a stopover point on the way to Europe, Singapore has become important as a destination in its own right for Australian traffic and a key hub for Asian traffic, which is a key focus for Qantas, said chief executive officer Alan Joyce.
More than just a stopover point on the way to Europe, Singapore has become important as a destination in its own right for Australian traffic and a key hub for Asian traffic, which is a key focus for Qantas, said chief executive officer Alan Joyce.ST PHOTO: SEAH KWANG PENG

Assurance comes as airline eyes new plane to operate non-stop Sydney-London route

The Flying Kangaroo is looking for a new mate to take it in a single hop from Sydney to London but this does not mean it will ditch Singapore a second time, said the chief of Australia's Qantas.

Five years after it dumped Singapore for Dubai as a stopover for Australia-Europe flights, Qantas will resume its Sydney-Singapore-London service from March 25.

But it is also eyeing a new plane - which it has challenged both Airbus and Boeing to build - to operate the route non-stop.

Speaking to The Straits Times on the sidelines of Singapore Airshow 2018, Qantas chief executive officer Alan Joyce said he is confident such an aircraft can and will be built by 2022.

But this will not necessarily mean that the Sydney-Singapore-London service will be withdrawn again, he stressed.

"We have four landing slots at London's Heathrow Airport and we're currently using just two, so there is capacity to grow. If the Singapore-London sector works really well, supported by feeder traffic from the Jetstar (Qantas' budget arm) Asian network, why would we withdraw the service?"

With the Asia-Pacific air travel market expected to grow strongly, Qantas is keen to tap into an increasing demand for flights to and from the region to London, Mr Joyce said.

QANTAS' CHIEF ALAN JOYCE: ON THE GROUNDING OF THE AIRLINE IN 2011

It was the only decision we could make at the time to force the matter into arbitration after the trade unions gave us 72 hours' notice before taking industrial action. Had we given in to their demands, the dispute would have continued and we would not have been able to make the changes that have transformed the company into a very profitable business.

ON THE LOWEST POINT IN HIS CAREER

The QF32 incident was probably the toughest time for me. The aircraft came close to a major accident and when you're dealing with safety and the lives of your passengers and crew, it can be very emotional. Cutting 5,000 jobs in 2014 was hard but it was a decision that had to be made.

(On Nov 4, 2010, Flight QF32 made an emergency landing at Changi Airport after one of its four engines exploded mid-air. None of the passengers or crew on board the Airbus 380 was hurt)

ON RETIRING

I'm only 52 and still enthusiastic about what I do. I'd like to go through Project Sunrise (Qantas' plans for a direct Sydney-London service), we have our 100th birthday coming up in 2020 and of course I'd love to be around for that. As long as the board and shareholders want me to continue, I'm not going anywhere soon.

ON THE RELATIONSHIP BETWEEN QANTAS AND SINGAPORE AIRLINES

We have a long history of being competitive and it's a great sign of respect for us that SIA has to put its best products into Australia. It tells us that they take the Qantas threat very seriously. On the flip side, we offer our best products, for example, our new Airbus 330 business class seats, to Singapore and one of our best lounges is here.

"It will all depend on the business and operating economics at the time....It's too early for us to predict," he added.

More than just a stopover point on the way to Europe, Singapore has become important as a destination in its own right for Australian traffic and a key hub for Asian traffic which is a key focus for the airline, Mr Joyce stressed.

"A decade ago, one-third each of our capacity was to Europe, Asia and the Americas. Today, more than half is to Asia. Given where we are located, it is natural that we would want to take advantage of the growth in this region," he said, adding that Singapore plays an important role in this plan.

Together with the new Sydney-Singapore-London launch, Qantas will also be adding more capacity to Singapore in the coming months with extra flights to Perth and Melbourne.

This will almost double total seat capacity to Singapore, to more than 18,000 per week.

The focus on Asia - even as Qantas pushes for a presence in the ultra long-haul market with plans to fly from Perth to London from next month and expand services from Australia to the United States - is part of a major overhaul of the business that hit rock bottom a few years ago.

Trouble started in 2011 when Qantas grounded all flights for an entire weekend amid escalating tensions with trade unions over pay, working conditions and its Asian expansion plan.

The bold move - which forced the government to intervene, ordering the airline to resume flights and banning trade unions from staging more strikes while negotiations continued - affected over 70,000 Qantas customers globally.

Three years later, in 2014, intense competition in the domestic market, high costs and surging oil prices led Qantas to axe 5,000 jobs as it reported a record A$2.8 billion loss.

Even as politicians and trade unions called on him to resign, Mr Joyce defied his opponents and put in place a three-year turnaround strategy to cut A$2 billion in costs.

Unprofitable routes were dropped even as capacity was added in stronger markets; new, more fuel-efficient aircraft were added to the fleet and in-flight products were added.

The airline also focused on customer service to build brand loyalty.

In the year to June 2016, Qantas reported its highest-ever net profit after tax of A$1.03 billion.

The following year, it made A$852 million (S$883 million), which was down 17 per cent year on year but more than what rival carriers including Singapore Airlines (SIA) earned. In the year to March 31, 2017, SIA reported net profits of $360.4 million.

Qantas may be firmly back in the black but Mr Joyce, who has steered the carrier in the last decade through its most turbulent years, is in no hurry to call it a day.

"As long as the board and shareholders want me to continue, I'm not going anywhere," said the 52-year old Irish-born Australian citizen.

A version of this article appeared in the print edition of The Straits Times on February 10, 2018, with the headline 'Qantas won't ditch S'pore a second time, says its chief'. Print Edition | Subscribe