Qantas group strategy update

The reduction in 2012/13 expenditure will be achieved through changes to the Group’s fleet plan,
including the rescheduling of two Airbus A380s previously intended for delivery in early 2013. These
aircraft will now be delivered in 2016/17. The Group’s final six A380s will be delivered from 2018-19.
Progress continues on the Group’s international transformation initiatives, with benefits of $280-$365
million to be realised across financial years 2012-14 from improving fleet economics, deepening
alliances, withdrawing from loss-making routes and modernising operational practices.
Consultation on the future of Qantas’ heavy maintenance operations in Australia has concluded and
a decision will be announced by mid-May after all options have been assessed thoroughly.
Qantas Chief Executive Officer Alan Joyce said the Group continued to deliver against its strategic
goals.
“Our priorities remain to build on our strong domestic business, enhance Qantas Frequent Flyer, turn
around Qantas International and grow Jetstar in Asia,” Mr Joyce said.
“Today we announce significant capacity increases and product upgrades for the Qantas, Jetstar and
QantasLink domestic networks in 2013/14, focusing on core business and leisure routes. This will
ensure that the Group retains a profit-maximising 65 per cent domestic market share while delivering
the best customer experience in the market.
“We have made substantial progress in our fleet renewal program – our average passenger aircraft
age is now 8.3 years, which is highly competitive with other major global carriers.
“As a result we are in a good position to reduce capital expenditure, targeting investment at business
areas that deliver sustainable returns while maintaining flexibility in forward fleet commitments. With
12 A380s now in service and our Boeing 747 reconfiguration program well underway, we have made
the financially prudent decision to reschedule a further two A380 deliveries – enabling significant
capital expenditure savings.
“We are focused on making changes that will increase productivity and competitiveness in a range of
areas, including modernising and consolidating our catering operations, streamlining heavy
maintenance and introducing new engineering processes. Further updates on these initiatives will be
provided in the coming weeks.
“Jetstar continues to expand across Asia, with Jetstar Japan to commence services ahead of
schedule in July 2012 and Jetstar Hong Kong expected to do so in mid-20131, in the first ever joint
venture with a Chinese airline. Airlines and investors in Asian markets recognise the value of
partnering with the Qantas Group to capture growth opportunities.
“The Group’s balanced portfolio and clear strategy makes it well-placed to manage the challenges of
ongoing high fuel prices and the changing global economy, while also taking growth opportunities in
Australia, Asia and elsewhere. We are acting decisively now to position ourselves for strong,
sustainable growth over the long term.”