The Asia Pacific region is a key growth driver for Australia’s largest airline Qantas, its CEO said on Monday.
Qantas has increased its capacity in the region partly because more tourists from Asia are heading to Australia, Alan Joyce told CNBC’s “Squawk Box.”
“Ten years ago, when I took over as CEO, we had one-third of a capacity to Europe, one-third to Asia, one-third to the Americas. Today, it’s 8 percent to Europe, it’s 52 percent in this region, and I think it will grow a lot further into the future,” he said. “We see the Asia Pacific market as the huge growth opportunity for us.”
When an airline raises its capacity, it usually refers to an increase in the total number of seats made available to passengers, either by adding more flights or using bigger planes.
Joyce pointed to a recent prediction from the International Air Transport Association (IATA) in October that said current trends in air travel suggest that the total number of passengers travelling by air could double to about 8.2 billion by 2037.
IATA said the “Asia-Pacific region will drive the biggest growth with more than half the total number of new passengers over the next 20 years” coming from the region due to a combination of factors such as strong economic growth, increased household incomes and favorable population and demographic profiles.
“This region is going to grow by an average of 4.8 percent. We think Qantas is well-positioned to take advantage of that,” Joyce said.
When asked if he had seen any dent in travel sentiment due to an ongoing trade fight between the United States and China, which experts warncould affect economic outlook for much of the region, Joyce said the outlook for Qantas remained positive.
“Our forward bookings are up 8 percent in value, we’re seeing real strong growth across the Australian economy … and then the inbound tourism and the outbound tourism are still extremely strong,” he said, adding that the airline’s forward bookings would likely help manage higher fuel costs in the next fiscal year.
Earlier this year, Qantas Group, which also includes the low-cost carrier Jetstar, said it delivered a record underlying profit before tax for fiscal 2018, helped by healthy levels of demand across important markets.
Qantas is also testing the use of facial recognition technology at various airports, including Brisbane and Sydney, for things like check-in, bag drop and security.
According to Joyce, that technology is “going to be the future of aviation” as more passengers opt to fly over the next 20 years, putting airlines and existing airport facilities under stress.
“For airports and airlines to start using this new technology to make better use of terminal facilities, i think is the way of the future,” Joyce said.