As part of Qantas’ investor day, they have shared their plans to boost profitability.
👉 Background: Right now, pent-up demand is well exceeding supply of aircrafts and staff. In fact, Qantas reckons that demand for international travel will continue to outstrip supply to the end of the decade.
👉 What happened: As part of Qantas’ investor day, they have shared their plans to boost profitability: grow its Earnings Before Interest and Tax (EBIT) margin from 8% to over 12% for international travel, and its domestic EBIT from 14% to 18%.
👉 What else: They plan to do this by implementing higher prices, but also by introducing longer-haul, more full-efficient flights... All with the goal of increasing their RASK.
💡Revenue per seat kilometre (RASK) is a crucial metric in the aviation industry used to determine profitability. It's about how much revenue the airline is making for every kilometre that a passenger travels.
💡Qantas' goal is to get passengers to travel less kilometres through direct long-haul flights, but pay more for its convenience.
💡So despite Qantas' potential cost savings from new, more fuel-efficient aircrafts, it seems like high airfares are here to stay...for a while at least.
Sign up for Flux and join 100,000 members of the Flux family
