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‘Record’ result for Jetstar as investments in Japan, South Korea pay off

Jetstar earnings have surged as international business picks up, particularly to Japan and South Korea.

Jetstar earnings have surged as international business picks up, particularly to Japan and South Korea. Photo: Getty/TND

Qantas’ discount carrier Jetstar has posted a record year on the back of strong demand for low-priced leisure airfares and an ambitious international expansion into Japan and South Korea.

Jetstar Group booked $497 million in earnings over the past financial year, according to accounts published on Thursday, up 23 per cent on the $404 million figure last year.

The result helped prevent an even bigger earnings slide for the wider Qantas Group, which saw before-tax profits plunge 18.6 per cent from last year’s record number to $2.078 billion in FY24.

“Jetstar delivered its highest result as it grew to meet increased demand from price-sensitive leisure travellers and saw the benefits from its new aircraft,” Qantas chief Vanessa Hudson said.

Jetstar has been cashing in on bargain-conscious flyers as airfares have risen and families are squeezed by cost-of-living woes, with 14.7 million people flown over the year (up 15 per cent).

International take-off

But the discount carrier’s international business performed even better, with new routes such as Sydney to Osaka (Japan) and Brisbane to Seoul (South Korea) driving a surge in profitability.

Jetstar’s overseas routes flew 8.3 million people in FY24, up almost 20 per cent, while earnings for the international arm, separate from Jetstar Asia, rose 65 per cent to $199 million.

Veteran aviation consultant Neil Hansford said the earnings are the product of investments Qantas Group has made in long-haul aircraft for Jetstar, which has freed up other planes.

He said that under the leadership of Jetstar boss Stephanie Tully, the airline has successfully navigated its way through the pandemic shutdown, adding additional capacity to increase revenues.

“They’ve got the delivery of these A321neos, which are long range, so it’s allowing them to put a long-range aircraft on and free up the 787-8 to go on longer routes,” Hansford explained.

“The stuff that was the middle-range stuff is being done with a 321 and they’re using the bigger capacity 787-8s to do some of these new routes [such as into Osaka, Japan and Seoul, South Korea].”

Qantas’ Group invested heavily in new aircraft during the pandemic years when it was able to secure cheap debt and a substantial amount of taxpayer support to keep the company afloat.

Those investments are now paying dividends, particularly across Jetstar, but in the Qantas side of the company too, with 16 new planes delivered across the year across both brands.

More capacity to come

Qantas Group plans to add another 10 per cent capacity across the local and overseas network over the next financial year to further leverage those investments, with Jetstar a particular focus.

The capacity of the discount carrier’s international arm is expected to soar 24 per cent, while its Asia business will be expanded by a whopping 53 per cent.

That all suggests Jetstar will book even higher earnings for Qantas next financial year.

Hansford said the business is primed for growth, with Qantas and Jetstar serving two sides of the air travel market.

“The whole philosophy of why Qantas did Jetstar was there’s a lot of routes that are heavily driven by leisure routes,” he said.

“You don’t need first-class seats or business-class seats on those. You just need to stack them high, give customers a proper level of service, and you’ll be successful.”

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