Qantas Airways CEO Vanessa Hudson Talks Revamping Fleet & New Routes

**SPEAKER_1** (0:02)
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**Guy Johnson** (0:07)
Would you pay an extra 20% to fly direct from Sydney to London, Sydney, Australia to London? No stops, it could be 19 hours, it could be up to 22 hours. It's a long way, it's nine time zones, but it's direct and it significantly shortens the distance effectively between London and Sydney.
Qantas is betting that demand for direct flights will be there. And from next year, it will be using custom Airbus A350s, they've got a big extra fuel tank to make this possible. Other routes will then follow, I think we're going to get 12 aircraft, they're all on order and at some point they're going to be delivered and some point we're going to see other destinations being added to the London and Sydney route. Vanessa Hudson is the CEO of Qantas, she is at the Airbus headquarters in Toulouse and she joins us now. Vanessa Hudson, thank you very much indeed for joining us. This is obviously a big step that has taken a while to get to. You are going to be launching this route, you have got the aircraft. How much demand Vanessa are we going to see for this route?

**Vanessa Hudson** (1:15)
Well, thank you for having me this morning. We're so excited. I'm coming to you today from the Airbus facility where we have seen our first A350-1000 ULA aircraft in the Qantas Colours. This aircraft is a new era of travel where it will be able to fly from the East Coast of Australia to London Direct and also to New York. We are seeing and hearing from our customers that this is something that they really want. I think the one thing to say is that this is not a leap of faith. This is happening now.
We have got some of the longest routes of any airline around the world.
We are flying currently today from Perth to London, from Auckland to New York. Those flights are very long, but we are actually seeing incredible demand for those flights. We are getting some of the strongest customer satisfaction and also some of the highest seat factors on these flights. So we think the extension of that one stop from the East Coast of Australia to London and that will be our first route. We announced that yesterday, so we are very excited. And even in the current environment, we are seeing that demand even stronger now to avoid those midpoints and to get to their ultimate destination in one go.

**Guy Johnson** (2:36)
Okay, do you think the Iran War has made it even more attractive? Do you think people will no longer want to go via Dubai or Doha to make that route? Do you think it is now better to go point to point, Sydney to London? And I think people will, will people pay for that?

**Vanessa Hudson** (2:54)
Well, I think that we are seeing today that customers are prepared to pay for that.
And that is on that Perth, London and also Auckland, New York. So we know that there is demand that is there. And we know with that customer segment that demand is growing. But that's not to say that customers also may prefer to take another alternate route. So our partner with Emirates post the conflict resolving, we believe will come back strong and we support them with that. And I think it's about option. And I think that's the one thing that's really important. There are some customers that want to go direct, but there also will be customers that want to go through the midpoints. And those options are really important. And we're going to continue to provide that on our own network, but also we're going to continue to really value the partners that we have, particularly like Emirates and also American Airlines.

**SPEAKER_4** (3:48)
Vanessa, good morning. Can you tell us a little more about what it is worth to go direct, Vanessa? What kind of pricing power do you anticipate having on those kinds of products?

**Vanessa Hudson** (4:00)
Well, I think that obviously the price is going to be determined by the demand. And our business case for Project Sunrise is based on what we are getting and what we are seeing today. So this is based on fact and the premium that we're currently getting on our long routes. Perth, London, particularly, we are seeing around about a 20 percent higher yield outcome than what the one point routes through either Asia or the Middle East. And that's been something that we have seen consistently for the five years at a minimum that these flights have been flying customers from Australia to direct. And so it's the proposition of getting there in one point. But it's also the fact that Qantas has actually been a ultra long haul carrier for many years. Australia, you know, is at a place in the world that is further away for many. And so we have got a capability and an experience in the cabin that is going to be second to none and it's going to be focused on making sure that that experience in getting that one stop is seamless for customers. And we're working with experts. We've been working with Sydney University for a decade around how to manage jet lag and how to actually make that experience really good. So we have taken every kind of approach to make sure that the experience is a great one.