Qantas’s inaugural A380 flight to Johannesburg took off this week after more than a year of waiting. Analytic Flying readers probably aren’t surprised as some on social media as it’s a topic we covered at the time of the announcement. In Sep 2023 we analysed the Australia-South Africa route to provide some context for Qantas’s strategy.
The analysis highlighted how deploying the A380 on the Sydney-Johannesburg route was a very creative move, enabling Qantas to backfill the lost capacity due to the retirement of the B747-400 that plied the route for many years. The analysis also highlighted how Qantas would modulate the frequency, sometimes operating the A380 4-5x per week rather than 6-7x per week that the B787-9 and B747-400.
We argued that it was viable to maintain capacity at lower frequency on the Johannesburg-Sydney route due to the limited competition on direct services. At the time we were skeptical that SAA would return to Perth anytime soon. On that point we were wrong! SAA returned to Perth with 3x weekly flights in April and will increase to 5x weekly in the coming months. SAA have also reestablished their codeshare partnerships with Virgin and Air New Zealand.
Over the last year we have gained more insight on Qantas’s fleet scheduling challenges. While some argue that Qantas don’t have enough long haul aircraft they are also facing a challenge of where to deploy the A380. The continued weakness of the Australia-United States market generates overcapacity risks. This reduces the case for deploying the A380 on its “traditional” US routes. This reinforces Qantas’s strategy:
Instead of Melbourne-Los Angeles returning to daily A380 service, it’s has only returned to 2x weekly A380 and 5x weekly B789.
The A380 then shifts to Sydney-Johannesburg, operating 4-6x weekly, replacing 6-7x weekly B789 flights which can then be redeployed to expand services elsewhere (e.g. new flights to Paris, expansion of flights to New York).
How much of a capacity boost?
A lot of the social media attention during the week focused on the increase in capacity with some commentators describing it as a massive capacity boost and near-doubling of capacity.
These claims are a little exaggerated but also lack historic context, ignoring the capacity loss from the retirement of the B747-400 and the broader capacity loss of SAA’s slow and lower capacity return.
To provide some context, we utilised our typical data sources to analyse historic, contemporary and forward looking capacity trends. Historic and contemporary trends capacity is estimated utilising BITRE data and our capacity tracker that utilises ADS-B data to fill the reporting delay gap in the BITRE data. We estimate forward looking capacity utilising published schedules (via GDS).
For simplicity and consistency, we track one-way seat capacity ex-Australia, i.e. Sydney to Johannesburg.
Qantas maintained fairly fairly consistent capacity on the Sydney-Johannesburg route before the COVID-19 pandemic. Between 2016 and 2019, seat capacity varied in a very narrow range, averaging 9659, 9358, 9537 and 9478 seats per month in 2016, 2017, 2018 and 2019, respectively. Capacity was managed by modulating frequency between 6-7x weekly services with seasonal increases typical in the months of Jan, Jun, Jul and Dec. Flights were operated with the B747-400 (364 seats).
The route was restarted in Jan 2022 with the smaller B787-9 (236 seats) replacing the now retired B747-400. Even as frequency was increased the B787-9 couldn’t achieved the same capacity. During a 31 day month, daily B787-9 flights can carry a maximum of 7316 passengers compared to 11284 on the B747-400.
Initially Qantas attempted to backfill this capacity by introducing flights between Perth and Johannesburg (3x weekly on A330-200). These were operated between Nov 2022 and Mar 2023 and were cancelled due to operational challenges at Perth and a now resolved dispute between Qantas and the airport operator.
However, during this period (November 2022 to March 2023), Qantas provided a total of 47818 seats to South Africa compared to 47674 in the comparable period between Nov 2019 to Mar 2020. Perth-Johannesburg appears to have been able to provide a viable option too backfill the lost capacity due to the retirement of the B747-400.
While Qantas have since resolved their dispute Perth, the A380 now provides an alternative solution to backfill capacity. Examining the forward looking schedule, Qantas plan to operate the A380 5-6x weekly, making some somewhat granular adjustments. For example, they’ll operate 5x weekly 7-27 Nov 2024, 5-31 May 2025, and 4 Aug to 6 Sep 2025, and 6x weekly during other period. The original schedule published a year ago even showed 4x weekly services at times, highlighting Qantas’s potential flexibility.
The forward looking schedule over the next year (Oct 2024 and Sep 2025) shows an average of 12004 seats per week, nearly double the 6360 seats per week during the preceding period of the B787-9 operation. However, this is only 27% higher than the final year of the B747-400 operation. This is a meaningful increase but not quite as “massive” as some of the social media hyperbole!
But what about SAA?
It’s also relevant to consider Qantas’s capacity alongside SAA. Between 2016 and 2019, SAA also maintained fairly consistent capacity on their Johannesburg-Perth route. Notably, Qantas maintained 55% market share of the total seat capacity compared to SAA’s 45%.
SAA’s return to Perth in Apr 2024, significantly later than Qantas’s restart. Furthermore, they returned at a significantly lower capacity, operating 3x weekly rather than daily as they’d done before the pandemic. Their forward looking schedule shows an increase in frequency to 5x weekly from Dec leading to an increase in capacity. Even accounted for this this SAA will still provide significantly fewer seats than they did before the pandemic. For example, between Jan and Sep 2025 they will provide an average of 5482 seats per month compared to 7495 seats per month during the same period in 2019.
Once both their capacity increases are implemented (i.e. Qantas introducing the A380 and SAA increasing frequency), they will offer a combined average of 17607 seats per month between Jan and Sep 2025. This is 4% more than the comparable period in 2019 (16980 seats per month). While market capacity is marginally higher, Qantas’s market share of seat capacity has grown to 69% (average of 55% between 2016 and 2019).
So, are Qantas really adding 130,000 seats?
The introduction of the A380 on the Sydney-Johannesburg route isn’t a story about Qantas massively increasing capacity. Rather, it’s a novel and creative move, helping backfill lost capacity due to the retirement of the B747-400 and SAA’s inability (or unwillingness) to backfill their own lost capacity.
Furthermore, it’s a network focussed solution that is balanced against other operational constraints including challenges on the Perth-Johannesburg route and capacity needs on US routes. It’s a creative approach to A380 utilisation in the face of weak US demand.
The claim that they’ll add 130,000 seats per year is partly true! It’s only true if you use an ahistorical baseline, comparing forward capacity to the post-COVID period. Utilising a historic baseline (i.e. pre-COVID period), Qantas will be offering about 60,000 more seats. This is a large and meaningful increase! However, this become moot when netted off against SAA’s reduced capacity, resulting in a net loss of 1000 seats per year.
Before we get accused of portraying Qantas as a bunch of altruists it’s important to recognise the counterfactual. In the face of limited direct competition it would’ve been easy for Qantas to utilise capacity shortages to drive up prices. It’s not like Qantas are why of maximising yields! However, given broader fleet constraints and the limited scope for redeploying the A380 on US routes in the short term they need to find routes to deploy the A380. As we have argued, the lack of direct competition on the Johannesburg route provides that solution! In a counterfactual scenario of strong US demand it’s highly unlikely that Qantas would be backfilling SAA’s capacity loss, nevermind their own!