Qantas to move capacity from US to Asia

Qantas Airways will slow capacity growth on its US routes in 2016 , redeploying them instead to the fast-growing Asian market.

The airline says in a presentation at an investor event that from April 2016, it will reduce its Sydney-Los Angeles services from 10 to seven weekly frequencies, in response to “moderating” market growth.

This is as alliance partner American Airlines commences a daily Sydney-Los Angeles service from December 2015, and with Qantas also to add six-times weekly services to San Francisco. As a result, the airline has cut its planned seat capacity growth to the US from 9% to 6%.

Nevertheless, the market is still expected to account for 31% of Qantas’s international ASKs.

With capacity being reduced in the US, the airline will deploy a Boeing 747-400 on three weekly Melbourne-Hong Kong services from April. Presently, the daily service is operated using Airbus A330-300s.

Qantas says it is also evaluating options to deploy the A330 on a thrice weekly service to Asia, which has been growing due to strong inbound tourism. North Asia accounts for around 20% of the airline’s ASKs, and Southeast Asia, 23%.

The carrier also notes that inbound tourism to Australia, led by Asia, is forecasted to increase by 5.9% by the end of June 2016, led primarily by arrivals from China. Although most of those passengers are expected to fly on Chinese carriers, Qantas says that this is positive for its domestic operations.