That was not what was supposed to happen.
In the years since jet fuel prices were rehabilitated lower in 2014, Qantas has been exchanging its fleet of Boeing Co 747-400 for aging and gas-guzzling Co 747-00 for 787-9 Dreamliners, it can be argued that & 39; The most efficient passenger jet in the air.
That's a good idea, because fuel is the largest single cost for most airlines, which accounts for between 20 percent and 30 per cent operating costs.
And yet the Qantas fuel costs, even when they are adapted for the distance that fly, appear on the increase.
According to the capacity of the seat available – measure seats, multiply by distance, known as ASK – otherwise fuel expenditure is around US1.85 cents, from US1.48 cents two years ago.
That is just a kerosene higher cost function: The number of HEFCs per fuel barrel, after a fairly steady increase in 2016 and 2017, has dropped significantly over the last six months of 2018.
How does a airline buying more efficient jets fail to have a more efficient performance?
One factor is that not all ACWs are created equally. Passengers and luggage usually form only 20 per cent to 25 per cent of total long-loaded jet pressures when they are removed, with the plane itself accounting for 50 per cent of the total and & # 39; the fuel that rests the rest of the rest.
As a result, taking 20 economic anchories and putting four business class seats in place can lead to better profits, but it will reduce ASK and rarely make a difference to the use of fuel.
The problem becomes more when you start to think about all the things that you can do with your new fuel efficient jet. If you compare 787-9 to 747-400 flying from Sydney to Hong Kong, the savings should be as dramatic as bills on Boeing marketing materials
The problem with a long-standing cross
It's more complicated when you start trying to do new things, such as the London-to-London direct flights that Qantas has been operating since last year and those from Sydney to London he wants to start in 2022.
Long-distance travelers are attractive to first class travelers and leave Qantas less at the mercy of airports such as Dubai, Singapore and Hong Kong.
At the same time, by not putting the best on the road, the hazards endanger a large amount of kerosene to carry the extra fuel they need for the second leg of the journey.
This is not a new phenomenon. The economist William Stanley Jevons in the 19th century noted that the use of British coal had increased after James Watt devised a more efficient steam engine, as low cost power dropped more widely than ever before.
Efficiency gains often tend to be wasted by less efficient use practices.
That's the more reason for Qantas to consider where he makes his money. From our estimates, every ASK on its domestic mainstream carrier produces around 18.66 percent of revenue and 2.62 cents of basic earnings before interest and taxes.
Not all full business seats and full service on international trips do better than the Jetstar Airways division on that revenue measure, and perform significantly worse in earnings.
Despite this, there is an international travel where Qantas has been giving extra capacity, while mainstream air fleets are blocked back.
This increase may be just what is needed to maintain its competitive position: although that logic has caused past problems: losses on foreign routes near the destruction of the carrier at an early stage in this decade.
The introduction of a more lesson jet-sip to a period that now disappears from low fuel prices has led to some years of flags for Qantas shareholders, but it has found cuts of rapid costs.
CEO Alan Joyce should be careful not to forget that. What efficiency does it give with one hand, it can take the other.