Passenger traffic at Australia's Qantas Airways and its subsidiaries increased in September due to domestic demand, but the carrier warns that yields remain under pressure due to intense competition.

Overall RPKs increased by 2.7% from a year before, with actual passenger numbers going up by 6.6% 3.4 million and with capacity as measured by ASKs declining by 2%. As a result, the load factor increased by 3.9 percentage points to 83.7%.

The Oneworld alliance carrier's domestic RPKs were 1.7% higher, passenger numbers went up by 1.4% to 1.4 million, ASKs were 2.6% lower, and load factors up 3.6 percentage points at 83.6%. QantasLink's RPKs were 4.5% lower, but the actual number of passengers carried increased by 1.1% to 358,000. Asks were 3.5% lower and load factors down 0.7 percentage points at 70.7%.

In Qantas' international business, RPKs fell by 4.5% and actual numbers declined by 20.8% to 487,000. Asks were 13.2% lower, and that helped the carrier to achieve a 5.7 percentage point increase load factor to 86%.

The airline's low cost subsidiary Jetstar had a stellar September. RPKs were up 48.6% and passenger numbers increased by 109.9% to 328,000. ASKs were up 42.2% and load factors were up 3.4 percentage points at 79.8%.

Despite the better performance in September in terms of traffic, Qantas warns that yields continue to be an ongoing challenge.

"Yields this year to date have been impacted by the significant decline in corporate volumes and price discounting in all cabins driven by intense competition on key routes. The stronger economy cabin volume performance to premium cabin performance has accentuated the yield deterioration," says Qantas.

"Whilst there are improvements in trading conditions in some markets, the nature of booking patterns on most domestic routs means that pricing and inventory actions tend to have longer lead times compared to domestic and other short haul routes."

Separately, Qantas says that it has hedged 85% of its expected fuel requirement for this fiscal year at $88 per barrel. "At current rates, Qantas has 75% participation in falling oil prices for the remainder of the year," it adds.

Source: Air Transport Intelligence news