ANALYSIS: Qantas’s network 'enhancements' highlight fleet constraints

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Qantas's recently announced frequency increases on two routes and one new seasonal route are unlikely to upset its competitors in the short term, and highlight the limits that its fleet has placed on it.

From 4 November, the Australian carrier will raise the number of services operated by Airbus A380s on the Sydney-Hong Kong route from four to five times weekly. This, it says, will add 5% more capacity to the route. The other two weekly services will continue to be operated using smaller Boeing 747-400s.

However, Flightmaps Analytics shows that the Qantas is presently well behind major competitor Cathay Pacific on the Hong Kong route. Without accounting for the marginal additional capacity from the A380 service, Cathay presently  provides 60% of available seat capacity on the route. Qantas, meanwhile, only accounts for 24%.

Percentage of Available Seat Miles on Sydney-Hong Kong route

October 2013

(Source: Flightmaps Analytics)

In terms of frequency, Qantas  is on par with Virgin Atlantic, which operates its services onward to London. The Australian carrier briefly operated a daily Sydney-Hong Kong-London service, but ended that in 2011 before entering into an alliance with Emirates for its European services.

Cathay, with four flights per day, has a much wider spread on the market. This likely makes the carrier a more attractive proposition for business travellers. It also has a much more extensive network, allowing passengers to connect not only to Europe, but also to North America and other destinations in North Asia.

An additional A380 service on the Hong Kong route allows Qantas to add a 747-400 frequency to its Brisbane-Los Angeles route, raising it to a daily service from 4 November.

In contrast with the Hong Kong route, Qantas already dominates the Brisbane-Los Angeles route and accounts for 60% of the capacity on the route with its six weekly services. The additional 747-400 service will give it 4% more capacity share.

Percentage of Available Seat Miles on Brisbane-Los Angeles route 

December 2013

(Source: Flightmaps Analytics)

Its only competitor on the route, Virgin Australia, operates four services per week with Boeing 777-300ERs. As the airline's long-haul network stretches from Abu Dhabi to Los Angeles, its five 777s are fully accounted for, meaning that Qantas is unlikely to see any additional frequencies being added by its competitor in the short term.

The one new route that Qantas has announced is a direct Perth-Auckland service. The seasonal service will be operated between 6 December and 4 February 2014. They will be timed to allow connections with Emirates' services from Perth to Dubai, possibly creating a new connection for New Zealand passengers.

Qantas chief executive Alan Joyce says that the route will utilise an Airbus A330 "that would otherwise be on the ground over the weekend", but at this stage it has not indicated if it will retain the service after February 2014.

On that route, Qantas will come up against Air New Zealand, which operates daily scheduled services with a larger 777-200ER. However, even with the new competition, the New Zealand carrier will still account for over 70% of the available seats on the route.

Percentage of Available Seat Miles on Perth-Auckland route

December 2013

(Source: Flightmaps Analytics)

Air New Zealand also plans to start seasonal Perth-Christchurch services from December to April 2014 with Boeing 767-300s, ensuring that it will be able to offer a compelling alternative to the Qantas service for some passengers.

Qantas's three network adjustments are hardly groundbreaking, and show how widebody fleet shortfalls have limited its international growth options. In 2011, it deferred the delivery of its final eight A380s to between 2016 and 2019. Subsequently, a year later, the carrier cancelled its firm orders for 50 Boeing 787-9s.

Flightglobal's Ascend Online database shows that Qantas has retained options for up to 50 787-8s and -9s for delivery from 2016 to 2019. The carrier has signalled that it will exercise those options provided that its international operations can reverse the losses experienced in the last few years.

With no new widebody aircraft due for the next three years, it seems that - barring a radical network adjustment - such small announcements will be the only international growth path for the airline in the short term.