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Incoming Qantas chief executive Vanessa Hudson says the airline’s balance sheet is “stronger than it has ever been in our history”, providing options to manage aircraft orders and investor returns until the end of the decade.

The company has $10 billion of liquidity available to it – a collection of cash, undrawn debt, but mostly aircraft that Qantas could secure loans against – she said at its first investor day since 2019. Debts were below targets, with $650 million of the most expensive loans paid off in advance.

Ms Hudson said this was done to minimise debt repayments between 2026 and 2028. Capital expenditure, including for new planes, is expected to top out at $3.2 billion in the 12 months to the end of June 2024.

Qantas says its new fleet will be younger and more efficient than those flown by Virgin Australia, and operating direct flights from Sydney to London and New York will deliver the airline sustainable profits.

Outgoing Qantas CEO Alan Joyce said the airline’s order for new aircraft, placed during the COVID-19 pandemic, had allowed it to secure planes that were now “as rare as hens’ teeth” amid high demand.

“We did [order planes] through the competition in the middle of COVID where nobody was ordering aircraft, and we got access to very attractive pricing,” Mr Joyce said.

“Vanessa led the deal on this very attractive pricing, very attractive delivery slots, and you talk to Boeing and Airbus now they’re essentially full for most of the rest of this decade.”

Mr Joyce told investors that new technology was central to Qantas’ plan to outperform rivals and improve margins. The next-generation aircraft are expected to transform Qantas, reducing costs through better fuel efficiency and longer-range performance.

Andrew David, the airline’s head of international and domestic, said the new planes would reduce Qantas’ average aircraft age to 9.9 years by 2027, from 16.4 years today.

In the domestic market, Mr David said modelling of Virgin’s 737 Max deliveries put the average age of Qantas planes below its rival’s by 2027.

And as Virgin readies to resume its initial public offering roadshows, Mr David said the total domestic profit pool in Australia would have grown by 80 per cent to $2 billion by the end of financial year 2023 compared with the five years before the pandemic.

“The growth has been driven by permanent structural cost transformation from Qantas and Virgin and the current market environment, and is considered a sustainable and rational position after Virgin’s administration,” he told investors on Tuesday.

Mr Joyce said Qantas’ incoming narrow body Airbus jets “are a lot more capable aircraft, a lot more cost-effective aircraft, and they give us a major strategic advantage”.

In the international business, Qantas expects its ultra-long-haul Project Sunrise flights to Europe and North America will deliver $400 million of earnings in the first full year it has all 12 aircraft flying.

The airline will launch the first of these services – Sydney to London – in 2025, with its network of 19-hour-plus journeys fully operational in financial year 2030, according to an investor presentation.

Some 41 per cent of the new seating on the Airbus A350s will be classed as premium, compared with 30 per cent on the Boeing 787-9 that flies passengers from Perth to London.

The new fleet would form a key part of what is now a “structurally different business” compared to its pre-pandemic structure that Virgin would not be able to replicate, Mr Joyce said.

Qantas had learned from flying Perth-to-London direct that customers want – and will pay more for – point-to-point long-haul flights, Mr David added.

Profitable routes

“People are willing to pay a premium to fly direct, and it’s even more so since COVID ... That’s why we’ve got the confidence to launch an aircraft that’s got 41 per cent of its seats in premium configuration,” he said.

When the new Airbus A350 jets are operating, Qantas predicts they will help deliver “incremental earnings in excess of [around] $400 million” annually by 2030.

If achieved, it would likely mean these routes are some of the most profitable of its international network, which produced $464 million in earnings before interest and tax in the six months to the end of December.

Other key points include a target for Qantas Loyalty to deliver up to $1 billion of earnings by 2030, powered by a “targeted expansion in financial services and insurance”.

On the closely watched fleet renewal project, which analysts expect will cost up to $15 billion over the next five years and see the airline take delivery of nearly 300 aircraft over the next decade, Qantas says strength in the balance sheet will provide “continued access to diverse capital, preferential pricing, terms and conditions”.

The investor presentation will be the last for Mr Joyce, who is set to leave the airline in November.

“We’ve been clear on the significant level of investment in the pipeline, and today we’ve given some detail on the returns we expect from it,” Ms Hudson said.

“We’re confident in reaching our [financial year 2024] margin targets, and we’ve set some ambitious but achievable earnings goals beyond that because we think ambition is key to long-term performance.”

Qantas shares closed 17¢, or 2.7 per cent, higher on Tuesday at $6.59.

The airline last week flagged profits before tax would reach between $2.425 billion and $2.475 billion for the 12 months to the end of June. Qantas Loyalty was on track to reach the top end of its underlying earnings target of between $425 million and $450 million for the year, the company said.

Qantas has unveiled a swath of additional services to New York, Tokyo and Los Angeles, as well as two new international routes from Brisbane from October, as part of a push to expand international capacity which is expected to lower fares.

The carrier has committed to lease two Airbus A330s from Finnair to help the airline meet its goal of returning to 100 per cent of pre-COVID-19 international flying capacity by March 2024. The agreement to lease the aircraft stipulates Qantas will also use Finnair pilots and cabin crew – known as “wet leasing” – for the first two years of the four-year arrangement.

The decision was met with outcry from Qantas pilots who accused the carrier of poor fleet planning and “outsourcing the spirit of Australia”.

Qantas chief Alan Joyce said the boost to the network will add “hundreds of thousands of seats” in time for summer, and give the carrier time to train an additional 300 pilots and cabin crew to takeover crewing the services. He also said ongoing supply chain issues continue to affect the aviation industry’s recovery, but the additional flights would put “downward pressure” on airfares.

“The Finnair pilots will fly services from Singapore to Australia to allow the Qantas pilots to do more flying to Japan. This doesn’t lose a single Australian job, it creates Australian jobs.

“These aircraft will create 200 cabin crew and 100 pilot jobs, it’s a positive for job creation and anyone who says anything else is just wrong,” Joyce said in a press conference on Friday.

“We know our customers are looking for great value and this additional capacity will also put downward pressure on fares.”

Australian and International Pilots Association President Captain Tony Lucas said the Finnair agreement was an “appalling decision to outsource Australian jobs and a significant failure of management”.

“Qantas’ decision to wet lease two Finnair aircraft is shocking, bitterly disappointing and could have been avoided with more effective management decisions,” he said.

“The decision to wet lease illustrates the failures of the fleet planning processes of the last five years and certainly recent decisions made during the pandemic recovery.”

The announcement adds to a series of new and returning routes the airline has already committed to. Flights to San Francisco are due to resume next week, and the airline will launch its new service from Sydney to New York via Auckland next month.

Seasonal services to Rome as well as flights between Melbourne and Hong Kong will also begin next month.

The airline has hired around 2400 pilots and cabin crew since borders reopened in 2021, but will need to recruit an additional 300 in order to support the additional flying.

The average cost of airfares has fallen from its 15-year peak at the end of 2022, but remains above pre-pandemic levels due to the sustained reduction in flying across all airlines.

The ACCC has been monitoring airfares for the past three years on a directive from the former Morrison government, but will no longer do so from July.

So far, no evidence of price gouging has been identified in the reports, but the watchdog said in December all carriers needed to reduce fares as capacity returned to the market.

Qantas’ newly crowned chief executive, Vanessa Hudson, has outlined plans to be an inclusive and empowering leader as she seeks to resurrect the reputation of the century-old airline giant after several bruising years that have frayed relations with customers.

As the first female to lead the airline in its 103-year history, the crucial advice she would take into the role included “three tips — take care of your customers, take care of your people and take care of the business”.

“Customers are absolutely at the centre of everything we do, and you need to take care of your people because they deliver for your customers,” Ms Hudson said.

“Taking care of the business and building a strong organisation means the customers and people who are with us today will be there for the future as well.”

Former CEO Geoff Dixon warned that once she replaces long-serving boss Alan Joyce in November, she would have to deal with an issue all Qantas leaders experienced.

“Everybody in Australia thinks they can run Qantas better than management,” Mr Dixon said.

“You’ve got to deal with that, that the guy next door will always know how to run it better than you do. You’ve just got to suck it up and use the high profile of the role to try to better the company.”

After years of speculation and internal jostling, chairman Richard Goyder said Ms Hudson was rated the best candidate in a field of about 40 people from the global airline industry, including Qantas Loyalty boss Olivia Wirth.

“We did a very comprehensive global search, we looked across the sector,” Mr Goyder said.

“We came up with a pretty extensive list of people and we reasonably quickly narrowed it down to the two internals.”

The choice of Ms Hudson ahead of marketing maestro Ms Wirth appeared to be based on her handling of Qantas’s financial and treasury portfolio during the challenging Covid crisis.

Although Qantas Loyalty remained profitable throughout the pandemic, Ms Hudson took a lead role in the balance sheet repair work, to deliver a record $1.43bn half year profit.

As a leader, Ms Hudson said she appreciated “lots of voices” in solving issues but was decisive when needed.

She acknowledged the airline did not always get everything right particularly during the difficult Covid pandemic, but knowing when to pivot was part of being a strong leader.

“I think that was an incredibly valuable lesson for me during Covid,” said Ms Hudson.

“I would also say I’m very humble. I want to be very approachable, I want to be very visible in the organisation and I want to be a leader who empowers not just those in my leadership team but the whole organisation to be the best they can be in the jobs they do.”

Former chairman Leigh Clifford said the airline industry was a “numeracy intensive business” and “you’ve got to be that to take a key role in it”.

“Vanessa is certainly qualified in that regard,” Mr Clifford said.

“She’s a strong person, she understands the business and is a very safe pair of hands. She’s had very good experience leading into this role.”

Ms Hudson joined Qantas from Deloitte Touche Tohmatsu in 1994 as an internal audit supervisor.

Her rise through the ranks saw her fill such roles as vice president of the Americas and New Zealand, executive manager of sales and distribution, and chief customer officer.

Mr Goyder noted her “deep understanding of the business” adding that she would be supported by a “deep bench of executives across the organisation as well as the board”.

She revealed that the notion of potentially leading Qantas one day started to become real when she was appointed chief customer officer in 2018 and joined the group management committee.

“When I stepped onto the GMC, that’s when you need to consider yourself as being part of the talent pipeline for the CEO,” said Ms Hudson.

“I recognised I needed to prove myself and over the last few years, that’s been my number one focus. I took nothing for granted and I definitely didn’t have any expectation that this is where I was going to end up.”

Along with Mr Joyce and Mr Goyder, Ms Hudson paid tribute to the woman she defeated for the role, Olivia Wirth, who was described as an “amazingly outstanding executive”.

Ms Hudson said she hoped she would remain with Qantas.

“I spoke to Olivia yesterday and I’ve said to Olivia just how valued she is in the organisation and what she will hear from me is I absolutely want to see her as part of Qantas into the future, and I’ll be working with Olivia to support her in the coming months and years ahead,” Ms Hudson said.

Unions were quick to react to the announcement, saying they hoped to “build a better Qantas” in partnership with Ms Hudson.

Australian Services Union assistant national secretary Emeline Gaske said the first thing they wanted to see from the new CEO was a reversal of Qantas’ policy to cut, outsource and offshore jobs.

“We have lost thousands of jobs at Qantas before and during the pandemic. While demand has surged back to normal levels, staffing has not,” said Ms Gaske.

Transport Workers Union national secretary Michael Kaine called the appointment a golden opportunity for a reset at Qantas, after years of bitterness between the two organisations.

“Our door is open for the new CEO to meet with worker representatives to establish a succession plan that would treat skilled and experienced workers as an essential investment rather than a cost,” Mr Kaine said.

“Alan Joyce has left a massive task for the next CEO, who must restore the spirit of Australia to Qantas and end Alan Joyce’s ideological war on its loyal workforce and frustrated customers,” said Senator Sheldon.

“Vanessa Hudson will inherit an incredibly dedicated and passionate workforce, which is by far Qantas’ greatest asset.”

Mr Joyce had no plans to leave before November, saying there was still much work to do before he left.

However he was looking forward to “future opportunities” and gave no indication as to whether he wanted to remain in the aviation industry.

Qantas shares slipped after the announcement, closing down 20c or 3 per cent at $6.54.

Qantas’s incoming chief executive Vanessa Hudson says the airline is well-placed to rebuild consumer trust as she prepares to take over from current boss Alan Joyce, who will leave the airline after 15-years at the helm in November.

Hudson has worked as the airline’s chief financial officer since 2019 and managed Qantas’s finance and treasury portfolio during the COVID-19 pandemic. The airline accrued more than $7 billion in debt over the two years of the pandemic when the aviation industry was grounded. Qantas returned to a record half-year profit of $1 billion in February.

“We have all been working very hard over the past six months, and we were very up front in terms of recognising the customer experience was not where we wanted it... We’ve got to win customers, and we’ve got to win their support,” Hudson said on Tuesday.

“We’ve invested an enormous amount of money, $200 million, in getting the performance back to where it needs to be and back where we were pre-COVID and our focus going forward is going to continue to improve on delivering to our customers, not just every day but every flight.”

Chairman Richard Goyder unveiled Hudson’s appointment on Tuesday after the board came to a decision late on Monday evening, ending months of speculation surrounding the airline’s succession plan. The Qantas CEO announcement is the second high-profile management change under Goyder’s watch in a week, with the AFL on Monday locking in its new CEO, Andrew Dillon, after a lengthy search.

Goyder on Tuesday said Qantas’ board had considered around 40 people for the role, but the choice was ultimately between Hudson and Qantas loyalty boss Olivia Wirth, who oversees one of the airline’s most lucrative divisions.

“I just want to say how much the board and I admire the two outstanding candidates in Vanessa Hudson and Olivia Wirth, and both were appointable to this role, but the board has made the decision that Vanessa is the right person to take Qantas forward,” Goyder said.

Hudson joined the airline in 1994 at just 24, and has worked in a number of executive positions across the group over the past 28 years, including as chief customer officer and senior vice president for Qantas across the Americas and New Zealand. She is the first woman to lead the airline over its 103-years of operations. It’s the first time Australia’s two major carriers have been led by women, with Qantas’s major rival Virgin Australia helmed by Jayne Hrdlicka.

“I can honestly say that when I joined Qantas at 24, I did not expect to end up as chief executive officer,” Hudson said.

“I don’t think that I ever thought it was an expectation or a goal that I had, but now that I’m here, I’m just so honoured. I’m excited to follow in Alan’s footsteps and looking forward to where we’re entering a new, incredibly exciting chapter,” she said.

Qantas shares slumped 2.5 per cent to $6.58 following the announcement.

Goyder, Joyce and Hudson did not weigh in on whether it was likely Wirth will depart the carrier as a result of Hudson’s appointment.

“ I absolutely want to see Olivia as a part of Qantas in the future and will be working with her to support her in the coming months and years ahead,” Hudson said.

RBC analyst Owen Birrell said Hudson was the most logical choice for chief executive due to the airline’s ongoing fleet renewal program.

“Given the significant fleet renewal program that Qantas is undertaking through project Winton and Sunrise, we believe Vanessa is the most suitable and appropriate candidate to execute on the strategy that she has been heavily involved in developing”.

Joyce said in an interview he looks forward to exploring new Sydney-based business opportunities.

“The time is right. At the board’s request, I extended my time as CEO to see through the COVID-19 recovery plan, so now that we’re on the other side of that crisis it’s a logical time for me to step down,” Joyce said.

“There is a lot still to be done, as [I have] six months left in the role, and I’m looking forward to working with Vanessa on a smooth handover.”

Joyce was recently appointed the incoming chair of the Sydney Theatre Company, succeeding Seek chief executive Ian Narev on a timeline yet to be determined.

Senator Tony Sheldon, a former vice president of the ACTU, said Joyce and the board of Qantas should retire immediately for what he deemed to be multiple leadership failings, including the redundancies of about 8000 employees at the onset of the pandemic.

“Rather than waiting until the end of the year, Alan Joyce could give Qantas workers and customers an early Christmas present by resigning today,” Sheldon said.

“Clearly the CEO resigning is not enough. The Qantas board, which green lit every greedy, illegal action taken throughout the Joyce era, desperately needs renewal.

“Alan Joyce has left a massive task for the next CEO, who must restore the spirit of Australia to Qantas and end Alan Joyce’s ideological war on its loyal workforce and frustrated customers.”

The Australian and International Pilots Association’s president Tony Lucas said Qantas pilots were invested in the airline’s success under the new leadership.

“We look forward to working with Vanessa in her new role to ensure the continuing growth of the Qantas Group to the benefit of the travelling public, staff and shareholders,” Lucas said.

Qantas chief executive Alan Joyce played a star cameo at the Chief Executive Women annual dinner on Thursday in Sydney, taking the stage to draw the raffle.

Mercifully, first prize was not lunch with Virgin Australia CEO Jayne Hrdlicka.

Joyce well knows how to play to his crowd and this one was eating out of his hand.

He acknowledged “amazing female [Qantas] directors” Belinda Hutchinson and Maxine Brenner, he name-checked Qantas Loyalty chief “the amazing Olivia Wirth”, and “the second female CEO of Jetstar” Stephanie Tully (the first was Hrdlicka and Joyce claimed credit for her, too).

Joyce singled out Vanessa Hudson, who was in attendance, as “the best CFO in the country”.

We seriously doubt this endorsement benefits Hudson, but of course, it’s not designed to. Joyce is really saying that Hudson is the best CFO in Australia because she works for him – the best CEO in Australia (“by a length of a straight”, according to Joyce’s acquiescent chairman Richard Goyder).

It’s all very honey-tongued for a credulous audience, but there’s a complete lack of humility beneath it. She’s the best CFO in the nation because she’s in lockstep with me as we rip the faces off our customers.

The truth is that Joyce would have extremely limited visibility of the capabilities of other CFOs in other industries and across the Australian market. He wouldn’t have a clue who the best CFO in Australia is.

Earlier this month, Hudson had her name on an opinion article in this newspaper that she almost certainly didn’t write. She claimed that Qantas received $2 billion of government COVID subsidies when the amount in her own audited accounts is $2.7 billion. She even boasted about the large amount of GST that Qantas collects from its customers!

This is what makes her the best CFO in Joyce’s eyes, her willingness to be thrown on grenades with his name on them. Not so much to protect the company’s reputation, but to protect his reputation, the restoration of which seems to be the company’s driving preoccupation.

In actuality, the first prize Joyce was drawing at the CEW dinner on Thursday evening was a $1000 Qantas flight credit.

Funnily enough, Qantas is still carrying an $800 million liability for unused COVID travel credits owing to its customers from cancelled bookings between March 2020 and October 2021. That has fallen from $2 billion at the peak.

Any credits not applied to a booking by December 31, 2023 will expire and Qantas will retire them as breakage revenue, a pure sugar hit to the airline’s already colossal profits.

Regular (non-COVID) Qantas flight credits expire after just 12 months.

Thanks to Joyce’s lack of capital investment, Qantas’ online experience for customers was already a bad joke, with qantas.com constantly crashing and the airline’s mobile app offering minimal functionality. Qantas is the Spirit of Australia, but its technology stack is borrowed from the government of Cuba.

Unsurprisingly then, the process to redeem COVID flight credits is far from seamless.

Customers must locate the original email from Qantas that contains a Qantas Pass card number, an expiry date and randomly generated password (as distinct from your Frequent Flyer password). If you have a PhD in Advanced Enigmatology, you may just manage to extract these data and unite them with the booking engine.

Completing this on your iPhone is interchangeable with NASA’s admission test. If you are older than 65, your chances are zero. If you are busy, you’ll never outlast the rigmarole.

You can always call the dedicated service centre, if you’ve got all day and all night. Credit holders are far more likely to end up with a broken spirit than a flight reservation.

These systems are visually impossible. Gambling companies have analysts who adapt user interfaces to seduce customers into clicking all the way through transactions. The airline appears to be using similar experts but deploying their acumen in the reverse. The page keeps timing out? That’s not a bug, it’s a feature!

Anyone who has ever tried to do this – or tried (in vain) to use a “complimentary lounge invitation” – will appreciate the maddening folly of this bargain. If I’m exaggerating, why do two-fifths of these credits remain unclaimed?

Self-evidently, every additional step interposed on the process makes it less likely a credit will be redeemed. When there’s an $800 million pure margin incentive for Qantas to make this difficult, how are we expected to believe it’s not difficult by design?

Qantas is in a fascinating dance right now, regularly reminding customers to use their credits, and deploying resources to that end, safe in the knowledge that most of them just aren’t strong enough.

Qantas wants to bank the free revenue but doesn’t want the blowback, riding the fine line between appearing to reunite people with their money and making it maximally difficult for that to occur. It’s actually very clever.

Qantas points to the terms of its competitors’ credit redemption schemes, which are the same or worse. “Everyone’s doing it” has never been a defence we’ve found compelling.

In recent years, Australian governments cracked down on retailers imposing shorter and shorter expiry conditions on their gift cards in order to book breakage on them. The minimum expiry period under consumer law is now three years.

If there are unclaimed monies in your bank account, the bank can’t take them. The same goes for your super fund. Eventually, these end up in Consolidated Revenue. In the case of Qantas, this would be a great way for Canberra to claw back some of the $2.7 billion of subsidies it gave them!

There is a long history of policy in relation to forfeited money – except, it seems, in the airline industry.

Qantas is ultimately charging without providing a service and then proposing to confiscate your money. This is fees for no service, scarcely different to National Australia Bank or AMP charging dead people, except Qantas customers aren’t dead, they just feel dead on the inside.

Sydney Airport is ready for the 2.4 million travellers set to pass through its terminals over Easter, but boss Geoff Culbert admits the airport’s ability to catch up after delays or cancellations is hindered by outdated regulations.

About 2.4 million people are forecast to pass through Sydney’s terminals from April 3 to April 23, with more than 1.5 million domestic passengers and 850,000 international passengers expected. This is the highest number of passengers over a holiday period since before the COVID-19 pandemic and marks a 90 per cent recovery on the same period in 2019, and a 34 per cent increase on 2022.

Culbert said his frustration at the curfew and restricted movement regulations are well documented. He hopes one of the consequences of the coming Harris review into Sydney Airport’s demand management scheme would be added flexibility.

“We’ve been speaking to the government about the fact the rules are outdated and lead to an inability for us to catch up, which ultimately hurts the travelling public.”

Sydney Airport has a curfew between 11pm and 6am and must not exceed 80 flights in any given hour. These restrictions create logistical chaos during bouts of bad weather. The airport is also increasingly constrained to single runway operations by the government body responsible for air navigation safety, Airservices Australia.

One in four flights were delayed in February, with 1500 cancelled. Airlines were quick to blame the shortage of air traffic controllers, which are employed by Airservices Australia, and the bad weather at Sydney Airport for the bulk of the poor performance.

A Qantas spokesperson pointed out that air traffic control staffing shortages impacted operations at the airport on 25 out of 28 days in February. A Virgin statement confirmed it was also affected by the shortages, the ground delay program and the weather.

Airbiz modelling in 2019 shows a three-hour weather disruption in the afternoon results in 41 uncleared flights by the time the 11pm curfew kicks in. Those missed flights cause 8000 unintended overnight stays in Sydney, 80,000 hours of delays and a backlog of flights that cannot be cleared until 11am the next day.

Qantas, Airbus and the Queensland government will contribute to a $6 million feasibility study to explore the creation of a $400 million ethanol-based sustainable aviation fuel factory in North Queensland.

With industries worldwide looking to cut their carbon emissions, airlines want to use more environmentally friendly options to help reduce their carbon footprint.

Qantas and Airbus will jointly invest $2 million into the feasibility study of a biofuel production plant in the state’s north that will use ethanol from sugarcane and wheat starch to turn it into sustainable aviation fuel (known as SAF).

The two airline industry leaders have committed to invest as much as $300 million to accelerate the establishment of the SAF industry in Australia.

Construction of the $400 million facility, which is proposed by Australian company Jet Zero using global firm Lanzajet’s “alcohol to jet” technology, could begin in 2024 and produce up to 100 million litres of SAF each year.

The ethanol will come from suppliers in North Queensland. The Queensland government will contribute $760,000 to the feasibility study, hoping a new facility will create 100 permanent jobs, as well as 1000 jobs during construction.

“Queensland is perfectly positioned to be a clean energy superpower because we have both the sunshine and feedstocks including the largest sugar industry in the nation,” Queensland Premier Annastacia Palaszczuk said.

Qantas chief sustainability officer Andrew Parker said the pilot project was the first but significant step towards turning agricultural and sugarcane byproducts into aviation fuel in Australia.

“SAF [sustainable aviation fuel] is a drop-in solution that we can use with current technologies and it’s critical to the decarbonisation of the aviation industry,” he said.

Qantas is currently using SAF sourced overseas to power commercial flights out of London and expects to add San Francisco and Los Angeles in 2025.

Jet Zero Australia CEO Ed Mason said sustainable aviation fuel was currently two to four times the cost of standard aviation fuel, but it would become cheaper over time as it is scaled up.

This would happen as the corporate sector helps offset the costs of sustainable aviation fuel to bring down their own carbon emissions.

“We believe we can get it to two to three times the cost of jet fuel and most of the buyers of sustainable aviation fuel – including Qantas who are purchasing out of Heathrow and other airlines purchasing out of San Francisco or LAX – are paying those sorts of numbers,” Mr Mason said.

“But it’s not airlines [who are paying those costs] but business customers, like Microsoft. Netflix or JPMorgan who are looking at reducing their corporate emissions who will offset their aviation travel and approach the airline. It’s the corporate sector who is taking on the price risk with SAF.”

Qantas has five big corporate customers – Australia Post, Boston Consulting Group, KPMG Australia, Macquarie Group and Woodside Energy – that have joined their sustainable aviation fuel coalition by contributing to the cost of the low-emissions fuel.

Jet Zero will also contribute $3.2 million from key institutional investors including Dragonfly, Chancery Hill Ventures, Tribeca Institutional Partners, to the pilot project which they hope will deliver 100 million litres of sustainable aviation fuel a year.

It takes about 200,00 million litres of ethanol to produce 100,000 million litres of aviation fuel. SAF reduces carbon emissions by up to 80 per cent.

LanzaJet chief executive Jimmy Samartzis, who was in Sydney for the announcement on Thursday, said the deal with Jet Zero was similar to others struck around the world to tackle carbon emissions from the aviation sector.

“All parties involved in this are serious in their commitment to scaling SAF production at the urgency our planet needs,” he said.

“LanzaJet looks forward to seeing the impact this project has on Australia’s domestic biofuels industry as well as the larger global impact.”

The International Air Transport Association has estimated that SAF could contribute about 65 per cent of the reduction in emissions needed by aviation to reach net zero by 2050.

But IATA acknowledged it would need a “massive increase” in production in order to meet demand.

Earlier this month, Ampol and Japanese energy giant ENEOS announced feasibility study for an advanced biofuels manufacturing plant in Brisbane.

The proposed facility could generate up to 500 million litres of sustainable aviation fuel and renewable diesel a year.

Australia’s biggest airline has extended the expiry date on $800 million in unused flight credits for a third time since the industry was ground to a halt due to the COVID-19 pandemic in 2020.

Qantas customers who found their travel plans cancelled due to pandemic-induced lockdowns in 2020 and 2021 had been required to book and complete their travel by the end of this year. This policy has been amended to let customers use the credits to travel until the end of 2024 so long as the trip is booked by December 31, 2023.

Qantas and its budget subsidiary Jetstar have been under pressure to reduce the sum of passenger credits, which totalled $2 billion over the two years to October 2021.

The airline has been accused of inflexible refund policies and poor customer service by some travellers who have attempted to rebook since flying resumed. Qantas has stood by its approach to refunds and credits, and said all customers on flights cancelled by the airline because of border restrictions were eligible for a cash refund of their credit should they prefer.

Out of the $800 million in unused credits amassed until October 2021, 76 per cent of the bookings were worth less than $500, 24 per cent were worth between $500 and $5000, and less than 1 per cent was worth more than $5000.

Flights cancelled by passengers are not covered by this policy or the amended expiry date. Qantas resumed its less flexible pre-COVID approach to refunds and flight credits on October 1, 2021, meaning those who cancelled their flights after this date are restricted to a flight credit to be redeemed within 12 months.

Rival carrier Virgin Australia’s travel credits are set to expire at the end of December this year, while Air New Zealand travellers have until January 2024 to book and travel.

The Australian Competition and Consumer Commission revealed last week it received more complaints about Qantas in the 2022 financial year than any other company.

The consumer watchdog was contacted about the airline 1780 times over the period, an increase of 68 per cent, as Qantas and its rivals struggled with staff shortages and supply chain issues, which led to mishandled bags, delays and cancelled flights.

“As Australia’s largest airline and an airline that generally charges a premium to fly, customers expect a better service,” the consumer watchdog’s report said.

“Qantas needs to do more to adequately invest in its systems, processes and people to dramatically improve its customer contact services and customer dispute resolution.”

Consumer groups Choice and the Consumers Federation of Australia have advocated for flight credits to be valid for at least three years and have both said so in submissions to the government’s aviation white paper.

Choice head of policy Patrick Veyret said the airline needed to do more to restore consumer trust and called for the credits to be treated like gift cards.

“The intense public outrage in response has clearly had some impact on the airline — but
there’s much more to do to make all credits workable for all consumers,” Veyret said.

Data from the Bureau of Infrastructure, Transport and Research Economics released on Thursday shows the cheapest discount economy and business class fares were at the highest rates in March since December last year despite trending down from a 15-year peak in the middle of 2022. The cheapest airfares this month are about 5 per cent more expensive than the same period last year.

Qantas has rejigged its loyalty program with the introduction of Qantas Marketplace, a new platform where members of its frequent flyer program can purchase products from over 900 premium and household brands.

The marketplace replaces the Qantas Rewards stores and represents a major expansion into online retail for the airline. 

Customers can spend accumulated Qantas Points on over 20,000 products, more than 1,000 more than the previous platform, and brands on board include Apple, Bose and Dyson. 

According to the Australian Financial Review, Qantas Loyalty brought in $905 million in underlying earnings between the 2020 and 2022 financial year. The airline had 14.7 million loyalty members – exceeding its 2024 target of 12.9 million. 

The organisation expects frequent flyer members to earn about 170 billion points and redeem 165 billion points in the 2023 financial year.

Qantas Loyalty CEO Olivia Wirth said the platform offers members a seamless and premium shopping experience that rewards them for every purchase.

“Our Frequent Flyers already earn more points on the ground than they do through travel. With Qantas Marketplace, we’re connecting them to hundreds of brands that they know and love, with the added benefit of being able to earn and use points,” she said. 

“Australia’s love of Qantas Points has seen us build strong partnerships with some of the country’s biggest brands. These connections are key to keeping our members engaged in the program and ultimately drive value for our business.”

Qantas told Inside Retail that the new marketplace would emphasise fashion, beauty and homewares – with a particular focus on sustainable and First Nations brands. 

The company added that frequent flyers will be able to earn at least three Qantas Points per dollar spent. This is up from two points under the previous system.

“Australia’s love of Qantas Points has seen us build strong partnerships with some of the country’s biggest brands. These connections are key to keeping our members engaged in the program and ultimately drive value for our business,” a Qantas spokesperson said.

Loyalty is in our currency

Qantas’ marketplace launch comes amid an intensification of cost of living pressures, which have seen retailers invest in, and emphasise, their loyalty programs as a means of retaining customers.

According to a consumer insights study by shopping app platform Klarna, in conjunction with Inside Retail, about 85 per cent of customers show greater loyalty to brands offering discounts, incentives, and rewards when marketed to them in a personalised way. 

Further, Commonwealth Bank reported a 15 per cent year-on-year increase in redemption volumes for its credit card reward program in December 2022, according to a report in the Sydney Morning Herald. Spokespeople for Woolworths Everyday Rewards program and Wesfarmers’ Flybuys loyalty programs also reported an increase in the number of members redeeming offers.

A survey of 1,400 Australians by McKinsey & Co showed that consumers were 10 per cent more likely to shop at an organisation with a top loyalty program, and 14 per cent more likely to increase purchase frequency. The Australian Loyalty Association also found that 52 per cent of customers were willing to share data as part of a loyalty program, while 44 per cent of customers said they would stay loyal to brands that offered great value for money.  This, despite the potential risks involved in data sharing.

A company that has promoted its loyalty program to great effect is Myer, via its Myer One program. According to its recent half-year results, 73.5 per cent of transactions came through the program, with the number of active members increasing by 4.1 million over the last 12 months.

Myer CEO John King recently told Inside Retail that it had increased the number of rewards and partnerships with other businesses, including Virgin Australia’s Velocity program, and recently American Express, which can be used online and in-store.

“We believe that loyalty programs are our currency. In times of economic hardship, people are looking to mitigate a lack of cash, and the points program is [a way to do that]” King said.

Super Retail Group – the parent company of brands including Rebel, BCF and Super Cheap Auto – recently invested $10 million into its personalisation offering, which includes an emphasis on new loyalty programs.

According to its half-year presentation, Rebel’s loyalty program is on track to launch in the second half of 2023, with Super Cheap Auto and BCF loyalty programs expected to go live in 2024.

Building loyalty through marketplaces

Qantas’ move to a marketplace follows a similar pattern by retailers and other organisations that have used this format to expand their offerings and build loyalty among their customer base.

According to a recent Inside Retail report, the city of Adelaide recently built a digital marketplace, which enables customers to purchase from more than 60 local retailers in categories including fashion, health and beauty, jewellery, homewares, toys, and food and beverage.

In December 2022, Nike launched its Web3-enabled platform Swoosh, a marketplace that allows users to trade digital objects such as virtual shoes and jerseys. It is set to extend to the physical realm, and allow members to unlock access to physical products and exclusive events. 

Another to capitalise on the marketplace trend is Chemist Warehouse, which launched a closed marketplace in conjunction with Marketplacer. Chemist Warehouse’s head of ecommerce and digital customer experience Nick Blatt recently told Inside Retail that a goal was to allow the business to broaden its range without further cluttering its stores. 

According to Qantas, the plan for the marketplace is to continue to expand its range of available products on offer, while also providing regular bonus points offers. Local brands that will feature include Scanlan Theodore, Rebecca Vallance, Jac + Jack, Country Road and many others.

“Qantas Marketplace will also be home to exclusive collaborations and designs between Qantas and leading brands,” a spokesperson said.

Sydney Airport’s chief executive, Geoff Culbert, has blamed high airfares and reduced airline capacity for stagnant domestic passenger recovery, as the airport reported a total of 2.7 million travellers for February.

Domestic passenger traffic through Sydney continues to hover at just over 80 per cent on pre-pandemic figures, with 1.7 million travellers last month.

“The domestic passenger recovery at Sydney Airport has been stagnant since April last year, with reduced capacity and high airfares impacting people’s travelling habits,” Culbert said.

Data from the Bureau of Infrastructure, Transport and Research Economics released on Thursday shows that in March the cheapest discount economy and business class fares have been at the highest rates since December, despite trending down from a 15-year peak in the middle of 2022.

The cheapest airfares this month are about 5 per cent more expensive than during the same period last year.

Just over 1 million international passengers passed through Sydney’s terminals in February, about 75 per cent of the average before COVID-19. The bulk of international traffic remains Australians visiting abroad. The number of US travellers increased to 80 per cent of pre-pandemic figures over the month.

There are now six airlines servicing 26 flights a week between Sydney and mainland China, but the number of Chinese nationals continues to lag at 25 per cent of 2019 figures.

“Momentum is starting to build in our international recovery, with China now back open to tourists after three years of border restrictions,” Culbert said.

Melbourne Airport recorded 2.3 million travellers over February, the highest number since before the pandemic but still just 80 per cent of the same period in 2019.

February is usually the quietest month for travel, but recent Bureau of Statistics figures show the country’s short-term international arrivals slipped to below 60 per cent of 2019 levels in January.

The number of Australians travelling overseas continues to buoy the recovery but is yet to top 80 per cent of pre-pandemic figures.

New Zealand was the biggest source of tourists, with more than 65,000 in January, but this figure is still 30 per cent down on pre-COVID levels.

Meanwhile, Australia’s competition watchdog has delayed a decision on Qantas’ proposed takeover of fly-in, fly-out charter airline Alliance Aviation for a fifth time.

The Australian Competition and Consumer Commission now expects to make a decision on the deal on April 20, having only just amended the date to March 20 last month.

Qantas has made no secret of its frustration at the drawn-out process. In October, the carrier said it was disappointed at the continual delays and had been transparent about its intention to fully acquire Alliance since it secured a 19 per cent stake in early 2019.

“The ACCC took three years to investigate that minority holding and made no findings that it lessened competition. The commission has also had the benefit of over two years of closely monitoring the domestic aviation industry,” a Qantas spokesperson said at the time.

Qantas also pointed out the ACCC took just 11 days to decide Regional Express’ acquisition of National Jet Express from Cobham last year and did not require a public review.