The transformations of Qantas Freight
In the ongoing downdraft, airlines have been shedding freighters left, right and center. Above all, fuel-thirsty older types like the 747-400BCF have been pulled out of service as the combination of poor yields and high fuel costs crippled their viability. In this setting, the news that Qantas was considering the acquisition of as many as four second-hand 747-400 freighters raised quite a few eyebrows when it surfaced in March. So far, the airline has managed with three 747 freighters – all of them leased.
“Qantas Freight markets the belly space capacity of all domestic and international Qantas, Jetstar and Jetstar Asia flights. Qantas Freight also operates a fleet of 13 freighters to supplement capacity to key import and export destinations,” Lisa Brock, executive manager of Qantas Freight Enterprises, says. “With several lease arrangements coming to an end over the next two years, there has been some speculation in the market, and as you’d expect we are looking at a range of options.”
Altogether, Qantas Freight commands a fleet of one B767-300F, four B737-300CFs, four BaE146Fs and one SAAB 34, plus three 747-400Fs wet-leased from Atlas Air. One of those 747 leases is due to expire later this year.
After some consideration, Qantas decided against the 747F purchase option and instead decided to lease a newer 747-400F, which should come on stream by the end of the year. The newer model offers greater range and capacity at improved efficiency, according to Brock.
“This lease is a good demonstration of ongoing commitment to the freighter network, but also our intent to carefully manage our cost base and drive down our operating costs,” she says.
For the most part, the carrier’s 747Fs go from Down Under to China and then head across the Pacific, the main reason for the airline’s 5 percent share of the China-U.S. airfreight market. Initially, this activity was concentrated on Shanghai, but in 2012, Qantas followed the migration of production to China’s interior and shifted one flight to Chongqing.
Brock says the new destination has met expectations, but she is non-committal on the possibility of routing more freighters through emerging gateways in the interior. “China is a key export market for Qantas Freight, and we continue to focus on being agile to changing manufacturing trends,” she says.
Management has had its hands full on Qantas’ home turf with the integration of Australian Air Express, having acquired in 2012 the outstanding 50 percent in the carrier that was held by Australia Post.
Another major undertaking has been the installation of self-service express check kiosks at key international ports in its home market (namely Sydney, Melbourne, Perth and Brisbane). Brock says customer response has been overwhelmingly positive.
“The kiosks have delivered a significant reduction in both waiting time and loading time in all ports,” she says.
Meanwhile, the other large transformation for Qantas took shape at the end of March, when the alliance with Emirates became operational. Pairing up with the Middle Eastern carrier created a joint network covering 233 points. For the Australian airline, it brought access to 65 destinations in Europe, the Middle East, North Africa and Asia.
The partners hope that their deal will soon include points in New Zealand served by Qantas. By mid-May, they were awaiting a decision from the competition commission in Wellington on their alliance.
The hook-up also means that Qantas’ cargo flows between Australia and Europe are routed via Dubai instead of Singapore, the carrier’s transit point so far.
“Transit times have improved for the majority of European destinations. Qantas Freight cargo landing in Dubai is now handled in the state-of-the-art Emirates Cargo Mega Terminal, and this co-location is helping simplify handling and reduce transit times,” Brock says.
She adds that early responses from customers have been positive.
When the agreement was unveiled last year, Qantas’ board signaled that it was looking to develop a partnership well beyond interline and codeshare activities. Ultimately, they were aiming for integrated network collaboration with coordinated pricing, sales and scheduling as well as a benefit-sharing model.