Qantas Airways Limited · ASX:QAN
Qantas Airways — Investor Day (May 2023)
98 slides from Qantas Airways's investor day presentation, May 30, 2023
Slide 1: Qantas Group Investor Day Presentation
30 May 2023 ASX Market Announcements Office Australian Securities Exchange Limited Lodged electronically via ASX Online Qantas Group Investor Day Presentation Qantas Airways Limited attaches the Presentation to be given at the Qantas Group Investor Day today. Media Enquiries: Qantas Media +61 418 21
Slide 2: Investor Day 2023
I N V E S T O R DAY 2023 Qantas Airways Limited 30 May 2023 ASX: QAN US OTC: QABSY
Slide 3: Disclaimer
Disclaimer This Presentation has been prepared by Qantas Airways Limited (ABN 16 009 661 901) (Qantas). Summary information This Presentation contains summary information about Qantas and its related bodies corporate (Qantas Group) and their activities current as at 30 May 2023, unless otherwise sta
Slide 4: Driving Sustainable Growth
DRIVING SUSTAINABLE GROWTH Qantas Investor Day 2023 | 3
Slide 5: What you'll hear today
What you’ll hear today Customer Qantas Group investing in improving our Customers’ experience Qantas and Jetstar positioned to deliver growth at industry- Domestic leading margins Qantas and Jetstar positioned to leverage unique competitive International positions to deliver margin and earnings grow
Slide 6: Qantas Group has a history of strong performance
Qantas Group has a history of strong performance Championing the Employer of Always safety first Spirit of Australia choice Strong & diverse Most trusted brand Leading Top quartile TSR1 portfolio of and record commitment to vs peers businesses Customer NPS net zero by 2050 1. Total shareholder retur
Slide 7: COVID-19 had an unprecedented impact… and we are stronger from it
COVID-19 had an unprecedented impact… and we are stronger from it COVID-19 GLOBAL INDUSTRY DISRUPTION • $4.8B raised in debt and equity The magnitude of COVID-19, coupled with the speed of onset and recovery, caused unprecedented disruption to the aviation industry • $1B delivered through restructur
Slide 8: Travel remains a top priority
Travel remains a top priority 1 Intent to travel remains significantly above pre-COVID levels1 QFF net spend intentions in the next 6 months4 2x more plan to fly domestically in the next 12 months International travel 31% Domestic travel 28% +80% plan to fly internationally in the next 12 months Gro
Slide 9: Investing for Customers
INVESTING FOR CUSTOMERS QANTAS GROUP
Slide 10: Strong, distinctive brands and unique interconnected customer value propositions
Strong, distinctive brands and unique interconnected customer value propositions underpin the Group’s success Spirit of Australia Leading Australian airline loyalty program All day, every day low fares • Best network and schedule • Valued and trusted loyalty ecosystem • Democratising air travel for
Slide 11: Relentless focus on on-time, reliable operations has seen Qantas NPS recover
CASE STUDY Relentless focus on on-time, reliable operations has seen Qantas NPS recover Most reliable major domestic airline Qantas Domestic NPS6 #1 1 • 10 out of last 11 months with the best OTP2 • Lowest average cancellation rate for last 11 months Industry hibernation Average pre-COVID Reduction
Slide 12: Qantas Airline significant investment in customer experience on the ground and in the air
Qantas Airline significant investment in customer experience on the ground and in the air DIGITAL INCLUDING BAGGAGE UPDATES ON THE GROUND IN THE AIR Better customer experiences: • Improve self-service $100M investment in global lounge Uplift in Food & Beverage across Qantas A350 Sunrise First • More
Slide 13: Qantas Loyalty investing for enhanced member engagement
Qantas Loyalty investing for enhanced member engagement EXPERIENCES AND DIGITAL PARTNERSHIPS REDEMPTIONS • Continued innovation and deeper • Expanding flight reward product partnerships across verticals and suite and improved hotel and shared value models holidays proposition • Expanding range of pa
Slide 14: Jetstar investment for price leadership and smoother travel
Jetstar investment for price leadership and smoother travel LOW FARE LEADERSHIP IMPROVED CUSTOMER EXPERIENCES PEOPLE Operational reliability New aircraft ~10m fares <$1001,2 expected in CY2023 Investing in systems and processes to Investment in A321LR/XLR Roll-out of new inclusivity training leverag
Slide 15: Delivering margin advantage in a stable and growing domestic market
DELIVERING MARGIN A D VA N TA G E I N A S TA B L E A N D GROWING DOMESTIC MARKET
Slide 16: Australian domestic market has seen stable growth
Australian domestic market has seen stable growth Aviation is critical to Australia Domestic RPT1 growth2 • Population centres are large distances apart RPKs (bn) • No viable alternative for most travel purposes 90 80 Pre-COVID, domestic RPT has grown every year 70 for the past 20 years • High LCC3
Slide 17: Qantas Group structurally advantaged share of a growing domestic profit pool
Qantas Group has established a structurally advantaged share of a growing domestic profit pool Domestic Industry Profit Average annual EBIT, $ millions ~2,0004 • Growth in domestic profit from FY11-15 to FY15-19 Qantas Group Other1 driven largely by greater capacity in market ~4005 ~+80% • Industry
Slide 18: Coordinated dual brand strategy drives segment success
Coordinated Dual Brand strategy drives segment success and sustainable industry leading margins QANTAS AIRLINES JETSTAR VIRGIN Premium (highest yielding) Price conscious (lowest yielding) SEGMENTS Corporate SME Premium leisure Price sensitive leisure 50%+ market revenue share Price sensitive busines
Slide 19: Sustaining Qantas Domestic industry-leading margins for FY24 and beyond
Sustaining Qantas Domestic industry-leading margins for FY24 and beyond Transformation and network have delivered …that will be sustained into the future a step change in earnings… Qantas Domestic EBIT margin evolution Qantas Domestic Value Drivers Key step drivers • Cost transformation • Network ev
Slide 20: Fit-for-purpose network profitably serves a widely dispersed domestic population
Fit-for-purpose network profitably serves a widely dispersed domestic population HID • Links largest populations together (e.g. SYD, MEL, BNE, PER) HIGH VOLUME TRUNK WEI e.g. MEL-SYD • High corporate and SME1 traffic DRW • Premium customer offering focus KCI CNS BME • Linking major cities together (
Slide 21: Network strategy underpins unrivalled connectivity proposition
Network strategy underpins unrivalled connectivity proposition for customers Connecting and direct traffic Japan Cairns • Breadth and depth of network and connection proposition enable travellers to fly to where they want, when they want Townsville Mount Isa • Expansive network stimulates pull-throu
Slide 22: Current and future fleet provide flexibility to optimise route economics
Current and future fleet provide flexibility to optimise route economics and drive revenue premium PLANNED FLEET BRINGS FULL COVERAGE WITH HIGH FLEXIBILITY Aircraft gauge and range provides valued flexibility and competitive advantage A330 HIGH • Comprehensive coverage to maintain and grow MELSYD -
Slide 23: Next generation fleet technology drives substantial transformation benefit
Next generation fleet technology drives substantial transformation benefit FLEET EFFICIENCIES DOMESTIC PORTFOLIO REBALANCING3 A220 vs B717 A321XLR vs B737 Percentage of domestic narrowbody RPT4 ASKs5 0% 1% Gauge +18% seats1 +15% seats 11% 137 vs 110/125 200 vs 174 34% 7% premium mix (+1ppt1) 10% pre
Slide 24: Further transformation underway, including best practice operational efficiency
Further transformation underway, including pursuit of best practice operational efficiency KEY FOCUS AREAS CASE EXAMPLES Investing in technology and process to optimise Network & Operations schedule and operations capacity Planning Schedule optimisation Ensuring rostering, training and delivery capa
Slide 25: Jetstar sustaining the leading Australian LCC position
Jetstar sustaining the leading Australian LCC1 position • Jetstar has the leading leisure proposition, serving 612 domestic routes BRAND PERCEPTION3 (Q3 FY23) targeting price sensitive leisure and business travellers • Stable earnings base and strong domestic operating margins A. Awareness B. Price
Slide 26: Jetstar Domestic targeting industry-leading LCC 15% EBIT margin
Jetstar Domestic targeting industry-leading LCC 15% EBIT margin for FY24 and beyond Jetstar Domestic positioned to achieve and sustain LCC1 … through delivering against the lowest cost base & industry-leading margins… optimising revenue Jetstar Domestic EBIT margin evolution Jetstar Domestic Value D
Slide 27: Jetstar fleet renewal drives margin and sustains cost leadership
Jetstar fleet renewal drives margin and sustains cost leadership Jetstar Narrowbody Fleet by ASKs5 (%) A321LR/XLRs expected to operate >50% of narrowbody capacity by FY27, A320ceo A321ceo A320neo A321LR/XLR delivering up to 12%1 total CASK2 improvement3 8% 16% 25% 12% 41% 47% 9% 52% 7% 2% A321LRs de
Slide 28: Continued focus on cost discipline & transformation is part of Jetstar's DNA
Continued focus on cost discipline & transformation is part of Jetstar’s DNA KEY FOCUS AREAS CASE EXAMPLES • End-to-end planning review focused on cost & revenue improvement Ongoing Cost • Continued supplier renegotiation and contract management Reduction • Data driven decision making e.g., aircraft
Slide 29: Incremental uplift in operational performance reduces costs and improves experience
Incremental uplift in operational performance further reduces costs and improves customer experience • Jetstar focused on improving operational reliability to pre-COVID levels and beyond through: Jetstar Domestic On-Time Performance2 – End to end planning & delivery – Precision Timing Scheduled (PTS
Slide 30: Supply Chain – Jetstar Auxiliary Power Units (APUs)
CASE STUDY Supply Chain – Jetstar Auxiliary Power Units (APUs) • An APU is a small engine on the tail of an aircraft that provides electricity and air to: – start up the main engines APU driven delay minutes per month2 – operate air conditioning ~-80% 4,000 3,764 – power the cockpit and cabin 3,500
Slide 31: Ancillary growth providing more choice with new offerings and services
Ancillary growth providing more choice with new offerings and services Ancillary Growth Ancillary Product Offering vs Leading LCC2 Domestic Ancillary Revenue1 Per Passenger Evolution ~38% growth achieved with focus on Jetstar only • Club Jetstar (subscription program) choice and driving valuable add
Slide 32: Driving Ancillary Revenue
CASE STUDIES Driving Ancillary Revenue FareCredit Bundle Selection Dynamic Seat Map Customers can cancel their booking and Making it easier for customers to view and A more efficient way for customers to view receive a voucher for the value of their flight select the bundle that’s right for them and
Slide 33: Proven coordinated dual brand strategy and performance enable Group to deliver leading margins
Proven coordinated dual brand strategy and performance enable Group to deliver and sustain leading margins Strong demand outlook in a stable market Protecting and extending dual brand network and Delivering sustainable margin advantage for margin advantage Qantas and Jetstar while growing top-line r
Slide 34: Securing International Growth and Earnings
SECURING I N T E R N AT I O N A L GROWTH AND EARNINGS
Slide 35: Global passenger growth reinforces the opportunity of unique direct routes
Global passenger growth reinforces the opportunity of unique direct routes from Australia 20-year passenger growth outlook1 provides confidence in long-term global market demand 2.4% p.a. 2.5% p.a. Europe North 4.3% p.a. America Middle East 4.9% p.a. APAC 3.8% p.a. Africa 3.0% p.a. Latin America 1.
Slide 36: Market supply constraints expected to persist for several years
Market supply constraints expected to persist for several years Total worldwide international market capacity and demand forecast1 Drivers of supply constraints % Pre-COVID • Pre-COVID capacity delayed return to market 150 139% 130% 134% — Long term storage causing maintenance delays 127% 138% 123%
Slide 37: Qantas International
QANTAS INTERNATIONAL Waoantas crour
Slide 38: Delivering greater than 8% EBIT margin for Qantas International for FY24
Delivering greater than 8% EBIT margin for Qantas International for FY24 and beyond Transformed business well positioned to deliver further … through fleet renewal and capture of revenue premium earnings growth… Qantas International EBIT margin evolution1 Qantas International Value Drivers Key step
Slide 39: Qantas strategically positioned to profitably serve the most important outbound markets
Qantas is strategically positioned to profitably serve the most important outbound markets Qantas leverages brand and distribution strength to serve outbound business and premium leisure customers Tails show key partnerships in market • Flying direct to where outbound travellers want to go – network
Slide 40: Largest network access from Australian market with over 1,300 destinations
Largest network access from Australian market with over 1,300 destinations1 oneworld • Providing unparalleled connectivity Global Alliance “glue” that provides: Network reach & between Australia and the rest of the world • Access to over 800 destinations distribution • Maximising bilateral distribut
Slide 41: New fleet technology driving long-term structural advantage
New fleet technology driving long-term structural advantage and future earnings Open new market opportunities with differentiated technology 1 787-9 Diversify network with more direct routes 2 A350 (Project Sunrise) Increase fleet resilience and flexibility 3 A321XLR & A220 Deliver sustainability ta
Slide 42: 787-9 has proven ability to drive margin through point-to-point offerings
1 787-9 has proven ability to drive margin through unique point-to-point offerings 787-9 has structurally changed London route profitability 787-9 enables point-to-point routes • Previous London route was loss-making, flown 2x/day by A380s • Additional three aircraft delivering in Q4 FY23 • Replaced
Slide 43: Project Sunrise and A350 establishing unprecedented structural advantage
2 Project Sunrise and A350 establishing unprecedented structural advantage Willingness to pay more for non-stop service, supported by Incremental earnings in excess of ~$400m p.a. by FY301 premium cabin mix ~$400m of incremental working capital benefit2 Europe North America (incl. London) (incl. New
Slide 44: The A321XLR and A220 will transform short-haul international flying
3 The A321XLR and A220 will transform short-haul international flying A321XLRs and A220s deliver improved mix of range and gauge for markets • Efficient, versatile aircraft capable of domestic and short/medium-haul international operation • A321XLR enables lower unit cost vs 737 given larger capacit
Slide 45: Future state proposition sustains competitive advantage and margin performance
Future state proposition sustains competitive advantage and margin performance 787-9 A350 family A330 A380 787-9 A321XLR Non-stop Europe, North A330 America East Coast A220 Europe, North America West Coast, South B737 America, South Africa, Asia Southeast Asia, New Zealand, Establishing structural c
Slide 46: Qantas Freight plays a key role in the Group portfolio
Qantas Freight plays a key role in the Group portfolio through its Domestic and International operations DOMESTIC INTERNATIONAL Competitive Leading Domestic air freight Strong brand with premium position market position with ~80% service offering and long term market share customer relationships Ded
Slide 47: $150m in structural earnings growth versus FY19
$150m in structural earnings growth versus FY19 Demand growth from structural change in eCommerce eCommerce growth • Driven by purchasing habits formed during the pandemic with +1 million more Australian households shopping online versus 2019 (11% penetration increased to 20%1) Traffic rights in CN-
Slide 48: Targeting a further $100m in earnings growth by FY30
Targeting a further $100m in earnings growth by FY30 Transformed freighter fleet with all A321/A330 aircraft servicing domestic and Asia Fleet Pacific region renewal • Fully containerised freighters driving greater uplift capability, unit cost improvement, and lower carbon emissions with scale benef
Slide 49: Jetstar International
JETSTAR INTERNATIONAL QANTAS GROUP
Slide 50: Jetstar is well positioned to serve international price sensitive demand
Jetstar is well positioned to serve international price sensitive demand J E T S TA R I N T E R N AT I O N A L P O R T F O L I O BENEFITS OF PORTFOLIO Jetstar Japan • Serves domestic Japan, with some utilisation Access to growing Asia market flying to North Asia • Well positioned for recovery as mar
Slide 51: Jetstar Australia International targeting 10%-12% EBIT Margin
Jetstar Australia International targeting 10%-12% EBIT Margin in FY24 and beyond Targeting improved financial and strategic outcomes in FY24 …delivered through… Jetstar Australia International1 EBIT margin evolution Jetstar International Value Drivers 12% 10-12% 10% Network Continued Cost Priorities
Slide 52: Jetstar Australia International playing where we can win in Asia Pacific
Jetstar Australia International playing where we can win in Asia Pacific International travel to/from Australia by 20271 Jetstar International capitalising on opportunities in Asia Pacific, leveraging its low cost position, strong ancillary revenue and brand strength to: – 16% growth in passengers (
Slide 53: Jetstar Australia in Bali
CASE STUDY Jetstar Australia in Bali #1 #2 AUSTRALIA TO BALI (FY23) Market Share (Seats)1 # Routes1 Jetstar is the #1 carrier Bali is the 2nd largest serving Bali international destination 51% 7 growing share from 31% in for Australian tourists2 FY14 to 51% in FY231 15% 5 Ongoing profitability suppo
Slide 54: Jetstar Australia fleet strategy driving cost improvement and new routes
Jetstar Australia fleet strategy driving cost improvement and new route opportunities A321LRs1 currently delivering: • CASK2 improvement through reduced fuel burn and higher utilisation • Growth opportunities beyond Bali i.e., Sydney-Rarotonga from 29 June 2023 Future delivery of 15 A321XLRs further
Slide 55: Competitively advantaged position in large aviation market with low LCC penetration
Competitively advantaged position in large aviation market with low LCC penetration • 4th largest domestic travel market in the world2 • Jetstar Japan is the #1 domestic LCC1 at Tokyo’s Narita Airport, serving 20 routes3 – First mover advantage, in the market since 2012 – Profitable for 4 consecutiv
Slide 56: Jetstar Asia growth planned following strong financial performance
Jetstar Asia growth planned following strong financial performance • Uniquely positioned in large Asia market – ~1/3 of world’s population and 17 countries within reach of JSA from Singapore • JSA holds the only non-Singapore Airlines Group AOC in Singapore – Focused on South East Asia and recently
Slide 57: New technology unlocks International margins and earnings growth
New technology unlocks International margins and earnings growth New fleet capability unlocks new markets including expanded point- Achieving the right and sustainable level of to-point routes margins for our business while growing top-line revenue and increasing invested capital Fleet and partners
Slide 58: Delivering Growth and Rewarding Members
DELIVERING GROWTH AND REWARDING MEMBERS
Slide 59: Qantas Loyalty is an integral part of the Qantas Group
Qantas Loyalty is an integral part of the Qantas Group Extending customer loyalty beyond flying Airline delivers member value in the air, Loyalty manages member value between flights (~15m member base) Airline LTV >2x higher for engaged Qantas Loyalty members¹ Core distribution channel for the airli
Slide 60: Qantas Loyalty sets the benchmark for loyalty programs
Qantas Loyalty sets the benchmark for loyalty programs New members joined QFF in the last year >1M >15 million members Australians identify QFF as main loyalty program¹ 25% Significant active member base Partners across a broad ecosystem 700+ Diverse network of partners allowing members to earn and
Slide 61: Clear strategy that focuses on member engagement
Clear strategy that focuses on member engagement to deliver sustainable financial returns FINANCIAL DRIVERS The Qantas Loyalty Flywheel Loyalty performance results a function of points volume Consistent, earned and redeemed, and member growth seamless and frequent Everyday engagement engagement Numb
Slide 62: Current momentum delivers record earnings in FY23 and FY24
Current momentum delivers record earnings in FY23 and FY24 F Y 1 4 - 2 4 Q A N TA S L O YA LT Y F I N A N C I A L R E S U LT S K E Y M E T R I C S R E L AT I V E TO F Y 1 9 2 (P R E- C OV I D) Points Earned1 (B) Points Redeemed1 (B) 17% more members EBIT ($m) 500-600 • Active earners 10% higher • ~6
Slide 63: Clear pathway to deliver on our FY30 growth ambition
We have a clear pathway to deliver on our FY30 growth ambition The most trusted and valued loyalty ecosystem >230 billion points earned and redeemed, targeting $800m - $1B EBIT by FY30 Member Portfolio Capabilities Grow the active member base Increase Earn and Redemptions per member Improve our oper
Slide 64: Growing the member base drives the flywheel faster
Growing the member base through broader and deeper engagement drives the flywheel faster Current member base is diverse and engaged Innovating to support further growth Member base skewed to more affluent Growing base at expected ~3% year on year members with QFFs having higher annual Incentivising
Slide 65: Redemption growth driven by expansion and diversification of proposition
Redemption growth driven by expansion and diversification of Loyalty’s proposition Maintaining strong value airline rewards Continued growth in travel portfolio to Retail expansion allowing redemptions with complemented with more options to use deliver across the breadth and depth of major Australia
Slide 66: Expanding the multi-brand and partner portfolio to meet all travel needs
Expanding the multi-brand and partner portfolio to meet all travel needs FLIGHTS HOTELS FLY & STAY HOLIDAYS TOUR PACKAGES CRUISES / RAIL EXPERIENCES • Unrivalled reach, with • Worldwide hotels range; • Time-bound and year- • More than 180 multi- • Deep partnerships, • Over 10,000 hand picked 1,200 d
Slide 67: Loyalty earn growth driven by step change in member activity
Loyalty earn growth is driven by a step change in member activity across our portfolio Breadth of program engagement multiplies points on offer Potential for further penetration across categories % of members actively earning in core category1 Earning in # Number of Level of Number of Use of loyalty
Slide 68: Increasing points earn through the flywheel effect
Increasing points earn through the flywheel effect from growth in overall redemptions Targeted expansion in Financial Services Continued scale of Coalition Partnerships Scaling QBR by rewarding SMEs6 for their and Insurance portfolio and delivering strong offering more opportunities for everyday ear
Slide 69: Tailoring our approach to SMEs through Qantas Business Rewards
Tailoring our approach to SMEs through Qantas Business Rewards Rewarding Australia’s Small Businesses… …delivering value to SMEs2 to earn across the Qantas portfolio Capturing engagement of 1 in 5 SMEs1,2 in the QBR program today with >450,000 members3 Rewarding SMEs for their travel Targeted divers
Slide 70: Investing in core capabilities to enable growth ambition
Investing in core capabilities will enable our growth ambition and improve operating efficiency Participation and partner model innovation Experiences that enable our people and to unlock higher margins delight our customers Continued innovation and deeper partnerships Compelling customer journeys w
Slide 71: Loyalty has a clear strategy to continue double digit growth through to FY30
Loyalty has a clear strategy to continue double digit growth through to FY30 Expansion of Loyalty Flywheel FY23-30 Qantas Loyalty financial results EBIT ($ millions) Illustrative Points Earn1 (B) $800m-$1B >230 ~170 Capabilities FY23F FY30T 425-450 Portfolio Innovate around Airline Non-airline Membe
Slide 72: Driving Sustainability
DRIVING SUSTAINABILITY Weantas crour
Slide 73: Committed to credible, ambitious sustainability targets in Climate Action Plan
Qantas Group is committed to credible, ambitious sustainability targets set in the Climate Action Plan Reduce carbon emissions by 25 per cent by 2030 (from 2019 levels) Net zero emissions by 2050 • Increase operational and fuel efficiency by an average of 1.5 per cent p.a. to 20301 Operational and •
Slide 74: Significant progress delivered to develop a domestic SAF industry
Significant progress already delivered to develop a domestic SAF industry Actions to catalyse domestic SAF1 production SAF Investments SAF Coalition SAF Ecosystem Development Founding SAF Coalition members Establishment of a “Jet Zero Investment commitment from US$200m Qantas Group/ Airbus partnersh
Slide 75: 'Alcohol to Jet' biorefinery project in Queensland
CASE STUDY ‘Alcohol to Jet’ biorefinery project in Queensland Qantas Group actively engaging in the development of an ‘Alcohol to Jet’ SAF1 plant expected to initially produce up to 2025 - 2026 100 million litres SAF per year (~20% of interim 2030 SAF target) supported by a collaboration of credible
Slide 76: Cost mitigations are in place to manage the climate transition
Cost mitigations are in place to manage the climate transition Customer & Investment Government Product Creating customer products that improve Strategic investment to scale climate Advocating for government action to sustainability of travel and businesses solutions while securing access and price
Slide 77: Qantas Climate Fund will provide direct investments
Qantas Climate Fund will provide direct investments to accelerate progress against sustainability targets Investment rationale Catalyse & Manage climate Progress 4 Support scaling of 1 2 3 • Today Qantas Group launches Qantas Climate secure supply costs against targets climate solutions Fund to acce
Slide 78: Wheatbelt Connect project is first investment of the Qantas Climate Fund
Wheatbelt Connect project is the first investment of the Qantas Climate Fund A native reforestation and carbon farming project to generate ACCUs1 Includes a study to investigate the conversion of native Mallee biomass into renewable fuels Project has been subject to extensive technical assessment an
Slide 79: All offsets investments will adhere to Carbon Offsetting Integrity Framework
All offsets investments will adhere to the Carbon Offsetting Integrity Framework We are enhancing offsets integrity by: Integrating carbon offsets into Releasing an RFP1 for Updating targets for First Group financial and risk science/technology-based Nations procurement management framework carbon r
Slide 80: Qantas Group is committed to long-term sustainability
Qantas Group is committed to long-term sustainability Expanding investment through new Qantas Climate Fund to scale solutions and secure supply across SAF, offsets and operational efficiency, building on the Airbus partnership Rolling out new fleet, lowering fuel burn Expanding customer and employee
Slide 81: Enabling Our People to Be Their Best
ENABLING OUR PEOPLE TO BE THEIR BEST
Slide 82: Voice of our people
Voice of our people Qantas Investor Day 2023 | 81
Slide 83: Unique and differentiated Employee Value Proposition
Unique and differentiated Employee Value Proposition CONNECTION EXPERIENCE BENEFITS HISTORY INCLUSION & DIVERSITY RECOGNITION & REWARD ICONIC BRAND CULTURE PROMOTION PURPOSE INNOVATION STAFF TRAVEL DEVELOPMENT SUSTAINABILITY FLEXIBILITY EMPLOYER OF CHOICE Qantas Investor Day 2023 | 82
Slide 84: Strong recruitment and retention
Strong recruitment and retention CABIN CREW ENGINEERS AIRPORTS PILOTS CORPORATE APPLICATIONS – 160K APPLICATIONS FOR 7K ROLES1 IN LAST 12 MONTHS RECRUITMENT 20K 18K 26K 4K 64K ~2,000 ROLES ~800 ROLES ~1,000 ROLES ~450 ROLES ~1,500 ROLES 10:1 23:1 26:1 9:1 43:1 ATTRITION RATE – PEAKED AT 18% IN DEC 2
Slide 85: Creating a safe and inclusive culture for our people
Creating a safe and inclusive culture for our people to be at their best FOCUS AREAS INCLUSIVE LEADERSHIP EMPLOYEE NETWORKS PURPOSE Gender Life Ages & AWARENESS ILLUMINATE ALTITUDE Balance Stages (LGBTQI+) (Gender) ENGAGEMENT DARAMU REGENERATE LGBTQI+ Accessibility ACCOUNTABILITY (First Nations) (Su
Slide 86: Supporting growth over the next decade
Supporting growth over the next decade 8,500 new operational employees over the next 10 years 2,300 new operational jobs in the next 18 months EXPANDING FLEET ENABLING OUR GROWTH Pilots recruiting 1,600 new Pilots New fleet 118 committed aircraft1 Cabin Crew recruiting 4,500 new Cabin Crew A350 New
Slide 87: Recruiting the future Spirit of Australia
Recruiting the future Spirit of Australia Qantas Group Pilot Academy Qantas Group Engineering Academy Future Talent Programs • Delivering a strong pipeline of highly • Providing aviation engineers for the Qantas • Rapid growth of Graduate and Intern skilled pilots Group and broader aviation industry
Slide 88: Connecting and engaging our people
Connecting and engaging our people Prioritising leadership Consistent daily and Recognising our people connection and weekly Group and industry through regular forums communication updates CONNECTION ACTION UNDERSTANDING Taking action on what Commitment to our people tell us recognition and reward R
Slide 89: Driving Performance Through Financial Strength
DRIVING PERFORMANCE THROUGH FINANCIAL STRENGTH
Slide 90: Sustainable financial strength underpins the Group's long term position
Sustainable financial strength underpins the Group’s long term position Balance Sheet Step-change in The right investment Capital allocation strength remains earnings, protected plan to drive discipline balances a competitive by ongoing performance, enhance investment and advantage transformation ma
Slide 91: Advantaged through Balance Sheet strength, stronger than pre-COVID
Advantaged through Balance Sheet strength, significantly stronger than pre-COVID Total liquidity of ~$10B1 Financial Framework: Optimised Capital Structure • Balance Sheet strength providing continued access to ~$3.5B1 cash balance $1B1 undrawn revolving >$5.5B1 unencumbered diverse capital, prefere
Slide 92: Multiple drivers of structural earnings growth and protection of leading margins
Multiple drivers of structural earnings growth and protection of leading margins EBITDA1 ($B) Growth in the active member base Recovery Plan, Loyalty, Transformed freighter Freight & Other fleet Increased Earn & Project Sunrise Ancil. revenue Redemption ~4.5 Continued AU per member e-commerce Narrow
Slide 93: A history of proven transformation, with future value unlocked with technology
A history of proven transformation, with future value unlocked with technology Achieved >$4B benefits FY15-23 Targeting ~$300m p.a. in ongoing revenue and cost transformation to offset inflation C O S T I N I T I AT I V E S TECHNOLOGY UPLIFT • 767/747 retirements, base closures and Singapore from ne
Slide 94: The right fleet plan that delivers strategic and financial objectives
The right fleet plan that delivers the Group’s strategic and financial objectives Optimised timing of fleet investment drives Flexibility to meet variable operating conditions through dual brand and aircraft gauge allocation, numerous benefits across the Group: deploying the right assets to the righ
Slide 95: Integrated layers of risk management reduces earnings volatility
Integrated layers of risk management reduces earnings volatility A proven Group risk management culture Proven risk management culture, as demonstrated through COVID • Prioritised repair of Balance Sheet Disciplined hedging including sale of non-strategic assets Diversified portfolio Low refinancing
Slide 96: Financial Framework drives ongoing discipline and governance
Financial Framework drives ongoing discipline and governance 1 Maintain optimal capital structure 2 ROIC > WACC1 through the cycle 3 Disciplined allocation of capital Grow Invested Capital with disciplined investment, return surplus capital to shareholders Minimise cost of capital by targeting a Net
Slide 97: Delivering for the Future
DELIVERING FOR THE FUTURE ACANTAS GROUP
Slide 98: Key messages from today
Key messages from today K E Y B U S I N E S S TA K E AWAY S Strong customer value Qantas and Jetstar fleet renewal proposition to deliver against unlocks new opportunities and Qantas & Jetstar Domestic target segments extends competitive advantage EBIT margin target FY24+ 18% 15% Affordability of fl