Is Qantas really that Sydney centric?
Alternative working title: Does Qantas really hate Melbourne?
A popular narrative among the Australian frequent flyer and avgeek community is that Qantas hates Melbourne (or any other city other than Sydney). It’s a narrative that’s easy to back up with an anecdote regarding the city pair that you want to fly that Qantas doesn’t fly or used to fly, especially if that city pair is flow by Qantas from Sydney or by another foreign carrier.
Our mate Caleb reckons Qantas hates Melbourne because they no longer have non-stop Melbourne-San Francisco flights despite United still flying the route and because Qantas fly to San Francisco from Sydney. San Francisco being United’s largest west coast connecting hub is irrelevant to Caleb, while Qantas’s strategy of shifting US capacity to Dallas is #fakenews!
On a more serious note, many will argue that Qantas’s cancellation of direct Melbourne-London flight via Perth in July 2024 is evidence of Qantas’s anti-Melbourne bias. Furthermore, as recently as 2012 they operated twice daily direct flights between Melbourne and London.
None of these flights were non-stop, rather direct flights operating via Dubai, Perth, Hong Kong and/or Singapore. The loss of the direct flight may be temporary as its likely to return as a non-stop flight as part of Project Sunrise in the coming years.
The counterargument is that the loss of direct flights to London on Qantas is purely symbolic. Other than a change of flight number, is there really much difference flying on QF37 to Singapore and connecting on QF1 to London (and QF2/36 on the return)? In fact, the outbound to London has a shorter stopover in Singapore compared to the direct flight from Sydney (and identical on the return).
QF1 SYD SIN 3:55pm 9:05pm
QF1 SIN LHR 11:05pm 6:15am⁺¹
QF2 LHR SIN 8:10pm 5:40pm⁺¹
QF2 SIN SYD 7:40pm 6:35am⁺¹
QF37 MEL SIN 4:55pm 10:05pm
QF1 SIN LHR 11:05pm 6:15am⁺¹
QF2 LHR SIN 8:10pm 5:40pm⁺¹
QF36 SIN MEL 7:40pm 6:15am⁺¹Is it just semantics?
This is a long chapeau, but what it highlights is that these debates are subjective. People will pick the side of the argument based on their personal preferences. So if you think the Perth connection is better than Singapore then you’ll feel aggrieved.
We wanted to weigh in since the topic has come up again and again on social media and we wanted to weigh in while trying to stay clear of subjective preferences. We have our own, and they’re meaningless to anyone other than ourselves. And they’re particularly unimportant to someone who thinks or feels differently.
Instead, we wanted to delve into some data to consider it more objectively. Working through the data we’ve found a few angles to inform the debate. It doesn’t solve it, but rather provides food for thought. The analysis focuses on two different metrics, Qantas international seat capacity over time from various Australian cities, both in absolute terms and relative to Qantas’s total capacity. And secondly, Qantas’s seat capacity over time as a share of total international seat capacity from that city.
Qantas international seat capacity
The first metric to look at is Qantas’s international seat capacity from different airports over time. We’ve limited our analysis to the big four: Brisbane, Melbourne, Perth and Sydney, as Qantas’s capacity from other airports is limited. We only consider outbound capacity as a proxy of total.
One methodological quirk we utilise is that we allow seat capacity to be double counted for flights with more than one stop in Australia (e.g. Qantas’s Sydney-Perth-Paris flights). This might appear counterintuitive since the same seat can’t be sold to two different people. Once a seat is sold Sydney-Paris, it can’t be sold Perth-Paris. However, since we’re looking at capacity rather than utilisation, the seat was available for sale from either Sydney or Perth, so we include it in both cities as a measure of Qantas’s capacity from that city. So what does the data say?
Firstly, it’s clear that Qantas is incredibly Sydney-centric! Sydney accounted for 58% of Qantas’s total international seats in 2024, with Melbourne and Brisbane way back with 23% and 14% respectively, while Perth has just 4%.
Secondly, Sydney’s dominance has waned over time, falling from a peak of 62% in 2014, but higher than the 55% when our data begins in 2006 (length of the time series is limited by BITRE data availability). Melbourne’s relative peak was 25% in 2019, having increased from 22% in 2006, while Brisbane’s current level of 14% equals its pre-pandemic peak (2016 through 2019; 19% in 2021shouldn’t be considered due to the vagaries of pandemic capacity). Meanwhile, Perth’s peak was 7% way back in 2007 and 2008.
These shares only tell part of the story. Qantas’s total seat capacity has ebbed and flowed over time, so a higher share could be a higher share of a smaller pot. Absolute seat numbers are important and relevant:
Since 2006, Melbourne and Sydney’s seat capacity has declined by 8% and 7%, respectively, while Brisbane has surged 45%. Perth has sunk 41%, albeit from a much smaller base. All three cities that saw declines have a similar U-shaped function which has shows some improvement in the lead-up to and in the aftermath of the pandemic (okay, maybe not Perth). Brisbane doesn’t and its growth has been consistent. In absolute terms, Sydney shed 226k seats between 2006 and 2024, far more than Melbourne’s 101k and Perth’s 148k.
There’s no doubt that Qantas is incredibly Sydney-centric, but the data also suggests they’ve become less Sydney-centric over time, but not to a degree that suggests a strong shift in strategy. But there’s something missing from this: Jetstar.
Jetstar is a full owned subsidiary of Qantas and macro-level capacity decisions are made at a group level. Capacity is scarce meaning that Qantas and Jetstar are competing within the group for allocation of capital, including investment in new aircraft. This doesn’t mean they’re competing with each other on an operational level, however the capacity of Qantas can’t be viewed in isolation of the rest of the group.
Something, something, Jetstar
Jetstar are significantly less Sydney-centric than Qantas, and have become even less so over time. Sydney accounted for just 24% of Jetstar’s total international seats in 2024, compared to 58% at Qantas. Melbourne is Jetstar’s leading city, with 29% of their total international capacity, while Brisbane and Perth accounted for 16% and 9%, respectively. Encouragingly, other cities accounted for 21% of Jetstar’s capacity, breaking from Qantas’s strategy of concentrating its capacity in the major cities.
It’s more challenging to consider the trends over time as Jetstar were in its infancy in 2006. In fact, some of the 2006 capacity in these figures includes Australian Airlines, a former Qantas subsidiary that Jetstar’s international operations de facto replaced. Considering a shorter period over the last decade shows exceptional growth at Brisbane, moderate growth Melbourne, and declining capacity shares at Perth and Sydney. Other cities is somewhat more volatile, particularly over the pandemic period. Brisbane’s growth since the pandemic is notable, albeit some of which is due to shifting of capacity from Gold Coast.
Absolute seat capacity highlights Jetstar’s growth story. Despite declining capacity shares, seat levels levels have actually increased in Sydney, but by much smaller magnitudes than at Brisbane and Melbourne.
We’ve previously described Jetstar’s growth in a short analysis in February, highlighting how it’s led capacity growth within the group. In 2024, Jetstar supplied 37% of group level seat capacity, making it somewhat obtuse to consider Qantas in isolation of Jetstar. When combining Qantas and Jetstar capacity, the picture shifts considerably.
Qantas Group
At a group level, Sydney accounted for 43% of total international capacity in 2024. Furthermore, it’s share has declined consistently from 52% in 2006. This decline is rather more significant than when considering Qantas’s mainline capacity in isolation.
Meanwhile, Melbourne accounts for 24% of total capacity, having increased from 22% in 2006, but lower than its peak of 27% prior to the pandemic. Brisbane has also increased significantly from 9% to 16% between 2006 and 2024, while Perth has maintained a consistent 6%. Other cities have declined slightly.
The trends are reinforced when considering data in absolute terms. Brisbane and Melbourne have added 618k and 633k seats each since 2006, or 114% and 48% in relative terms. These increases are nearly double that of Sydney’s 306k or 10% increase.
Viewed from an incremental perspective, i.e. of the additional capacity added by the group as a whole, Brisbane and Melbourne account for 38% and 39% of the net incremental capacity growth, compared to just 6% and 19% at Perth and Sydney, respectively.
Viewed together, these data and trends reinforce the view that Qantas is incredibly Sydney-centric, however it’s become significantly less Sydney-centric over time.
But what about other carriers?
The previous analysis is just one way of looking at the world. It’s comparing Qantas to itself. As the introduction noted, the concern isn’t just Qantas maintaining routes from Sydney while cutting routes from other cities, but that foreign carriers continue to maintain and even grow routes from Brisbane, Melbourne, Perth, etc.
The narrative goes that we can see that Qantas are neglecting Melbourne because of the manner in which foreign carriers pump capacity into Melbourne. For example, Singapore Airlines have 5x/day flights and Cathay Pacific have 2-3x/day flights, yet Qantas only have 2x/day and 1x/day to Singapore and Hong Kong, respectively.
This obviously ignores the network effects that these carriers have at their connecting hubs, but it does raise an important point of comparison. In addition to comparing Qantas to itself, we must also compare their capacity to all other carriers. The point of comparison is Qantas’s international seat capacity as a share of total capacity from each city, rather than Qantas’s total Australian seat capacity.
When considering Qantas in isolation we see that it accounts for 24% of all international seats from Sydney, significantly higher than the 19% and 15% they hold at Brisbane and Melbourne, respectively. Again, Qantas looks particularly Sydney-centric.
One again, it’s also become significantly less Sydney-centric over time, having seen their share decline from 31% to 24% since 2006. Melbourne’s share has also declined from 27% to 15%, while Perth has experienced an even more most rapid decline, from 25% to 7%. Only Brisbane has fared better, seeing their share increase from 16% to 19%.
This analysis undermines the narrative that they’ve become significantly less Sydney-centric over time given the equally significant declined at Melbourne and Perth, however we might also argue that it’s become far more Brisbane focussed. But let’s not forget Jetstar again. The Jetstar story looks entirely different, with their seat share increasing considerably from all cities. Jetstar now hold 12% at Melbourne and Perth, and 13% at Brisbane, while their seat share at Sydney is just 7%.
At a group level, the trends look far less less volatile, and reinforcing the large capacity pivots that we observed in the previous analysis. When combined, Qantas and Jetstar hold 31% of the total seat share at Sydney, having declined from 33% in 2006. However, the share has been consistent for a number of years.
Melbourne’s share has declined from 30% to 27% since in 2006, however it’s shown consistent improvement since a low of 21% in 2010. Similar trends are observed in Perth. Once again, the growth story is Brisbane, with the group holding a 32% share of international seats, having increased from just 19% in 2006.
So does Qantas really hate Melbourne?
The question was facetious, however it’s an important theme that’s helped us navigate the analysis. Instead, the analysis considers the Sydney-centric nature of Qantas and its evolution over time. The conclusion is clear: yes, Qantas is incredibly Sydney-centric, however this is a very narrow view. We highlighted how one can’t look at Qantas in isolation of Jetstar given the important and growing contribution to the groups’s capacity.
Jetstar have grown to account for 37% of group-level capacity. This is even more important when considering how Jetstar has effectively accounted for all group-level incremental capacity growth in the last two decades. Put simply: as a group, they’ve added 1.9 million more seats per year compared to 2006, yet Jetstar have added 2.6 million! When considering group-level capacity, they’re meaningfully less Sydney-centric.
The status chasing frequent flyer among us might ridicule Jetstar’s international capacity. It’s just a budget carrier without a premium product (their business class isn’t business class and should rather be called premium economy). Status credit and points earning isn’t sufficient to get us to platinum status and that first class lounge. But nobody is forcing you to fly Jetstar and even if you don’t, its yield segmentation allows Qantas to increase the number of premium seats on mainline aircraft and generates important price competition in the market. The status chasers among us benefit without even flying Jetstar!
It also shouldn’t be surprising that Qantas is Sydney-centric. It’s not unusual for legacy and network carriers to have a dominant hub. We find similar strategies pursued by legacy and network carriers around the world (e.g. Korean Airlines in Seoul, Japan Airlines and ANA in Tokyo, BA in London, Iberia in Madrid, Air France in Paris). In fact, we might argue that Qantas is far less Sydney-centric than any of these carriers are around their dominant hubs! Exceptions to this are typically the result of unique circumstances, e.g. not every country is as large as the United States that allows multiple airlines to have multiple hubs, and not every country is as spread out as Canada where Air Canada has multiple hubs.
The more surprising result is how Qantas has become less Sydney-centric over time, and not just at a group-level. At a group-level, its held its own in Melbourne, maybe contrary to public opinion that often conveniently ignores the impact of Jetstar. But the rise of Brisbane highlights how the group has sought opportunities to shift capacity growth outside of Sydney. The magnitude of the trend is too large to be an accidental artefact in the data.
This analysis is only as strong as the data we’ve utilised and it has its limits. One caveat is that it only considers seats and doesn’t weight for distance (i.e. available seat kilometers (ASKs)). That’s a more accurate measure of capacity, however the framing of this analysis is somewhat narrow and seat counts are able to highlight the macro-level trends.
More importantly, the analysis isn’t able to account for the most recent trends and future capacity shifts. For example, it doesn’t yet fully account for Qantas and Jetstar’s renewed interest in Perth with several new recent new routes, and several former routes (e.g. Auckland and Johannesburg) returning next month.
No doubt, some readers will disagree with our conclusions, however the data are the data. And that data shows a lot of nuance. If you really believe they hate Melbourne, then maybe the final set of figures would force you to say they hate Sydney too. They certainly don’t, but it reminds us that too much of the hate is just “vibes“!
Good analysis thanks. My one criticism “Korean Airlines in Seoul, Japan Airlines and ANA in Tokyo, BA in London, Iberia in Madrid, Air France in Paris). In fact, we might argue that Qantas is far less Sydney-centric than any of these carriers are around their dominant hubs!”
Well yes Singapore Airlines hubs through Changi too… but Qantas hubbing through Sydney so disproportionately to the other similarly sized city which is basically equidistant from from all international destinations is nothing like any of the other carriers and hubs you mentioned. Most of them have a single primate city where there is no question about hubs.