Stephanie Tully: Jetstar CEO on Qantas and Jetstar committing to NZ despite axing flights

Qantas and Jetstar have announced their biggest-ever investment in New Zealand. 

Chief Executive Vanessa Hudson says the Qantas Group wants to work with our Government to achieve more routes, access, and affordability. 

She says Jetstar's undergoing it's biggest-ever expansion in New Zealand and has added more than 800-thousand trans-Tasman seats over the past 12 months. 

Hudson acknowledges the airline's had to hike fares and cut some flights due to rising jet fuel prices, but says committing to New Zealand is important. 

Jetstar CEO Stephanie Tully told Mike Hosking their biggest challenge is the fuel price, so they have to manage their business and stay focused on how they can mitigate that. 

She says the reason she, Hudson, and other executives are in the country is to reaffirm their commitment to offering great value to travelling New Zealanders.  

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Episode Transcript

Speaker 1 (00:00):
So let's get into a JITs oar CEO. Stephanie Tully is, well,
that's very good morning to you, hey, Mak, how you
doing very well. It's just quoting from last night's discussion
with the Quantu CEO and investment in New Zealand all
that sort of stuff. Last time we had you on
the program, it was Hamilton as an international player. Oh,
how the world has changed.

Speaker 2 (00:17):
Eh, yeah, Well you work in aviation, Mike. It's never dull,
that's for sure, and it's certainly with what's going on
the Middle East a particularly challenging time right now.

Speaker 1 (00:30):
Do you have any idea how this unfolds as an
airline for you? Given what's happening in the world.

Speaker 2 (00:36):
We just need to because it's obviously very dynamic. We just
need to focus on the things that we can and
the things that we can control. Obviously, we are working
with the governments and the fuel suppliers on both sides
of the Tasman and we get honestly increasingly confident about
the fuel supply situation. Obviously, the biggest challenge is the
fuel price, so we've got to just manage our business

(00:59):
and keep focused on how we can mitigate that but obviously,
especially with a low FAES carrier that Jetstar is, you're
never going to fully mitigate the stress that fuel price
is under at the moment. So we do what we
can to do that, but obviously keep focused on what
we do, which is off of low fares. And part
of the reason Vanessa, myself, Cam and others are in

(01:20):
Wellington now is to just reaffirm our commitment to New
Zealand because we obviously, as you say, have been growing
a lot here, more than any other carrier, and we
want to reconfirm we're not going anywhere. We're here to
stay and we're committed. And New Zealand is such an
important market for US QUANTUS and Jetstar domestically and the

(01:40):
Transaitasm is such a busy and important international route that
we are here to stay and we will reconfirm that
to New Zealanders and do all we can to keep
offering great value to New Zealand's the New Zealanders who
still want to travel while this is going on.

Speaker 1 (01:56):
Just quickly, on supply, we had the CEO B in
New Zealand on he said, Supply is now not an issue.
We will not run out of fuel. Price is a problem. Yes,
but supply isn't Would that be your assessment?

Speaker 2 (02:09):
Yeah, I think that's increasingly the case. I think you
can navi sate it's never going to be an issue
because we've still got a major oil straight you know,
one day open, the next day closed. But the reality
is suppliers are getting sourced from other places, which is fantastic,
and we've got you know, I would say increasing confidence

(02:31):
and that in a rolling view, that supplies an issue.
And what you've also seen makes airlines as they you know,
try to manage the escalated fuel price, also look at
their capacity, so you've seen some reductions in capacity to
get through this, so that means there's no supply to
go around as well. So I think that's a good

(02:52):
assessment increasing confidence in supply. I think price becomes the
major challenge and how long that price is escalated at
the levels.

Speaker 1 (03:00):
For my broad observation of the cutbacks that have gone
on in New Zealand's been involved as well, and the
very really small airline operators in this country needs some
sort of government help at this particular point in time.
But my observation of you guys as a group is first,
cab off the rank to be cut was in New Zealand.
Is that an unfair observation A little bit.

Speaker 2 (03:19):
Sorry, Mike, But we cut across all parts of our
business Connie and jetst O, domestic International, New Zealand, Domestic
and transit husband as well, so we did that pretty
much all at the same time. Obviously, what we've done
in New Zealand is really we haven't cut any routes.
We've tried to just consolidate flights on the same route

(03:42):
where we've got good customer recommodation options and really focused
particularly on how great the support has been from some
of those New Zealand airports you mentioned Hamilton, Duneed and
you know, lots of the new places that just has
been flying. We're really conscious of our commitment to those
places and staying here, so really focused on keeping up

(04:03):
our network, just looking to consolidate where it makes sense
because obviously our costs are higher and when we're committed
to low fares, it's what jet Star does. We've got
sales in the market today for sixty three dollars Aukland
christ Church, so we're not going to walk away from
our proposition to customers as well, and we're really grateful
that New Zealanders are giving us a go.

Speaker 1 (04:22):
How do you explain that. I was talking to somebody
the other day who could understand the concept of that.
In a crisis fuel wise, where prices are going up
and roots are being cut, how is it you offer bargains?

Speaker 2 (04:35):
I think it's you know, you sell seats on an
aircraft for different prices, and it's really important for jet Star.
We have generally low cost carriers have thinner margins, so
it's important to get the traffic to our website and
to get people interested in jet Star. It's still important
that we offer low prices. You still can then manage

(04:56):
to our focuses in making sure the overall price we
sell for seats on a plane managers to cover our
cost still, and that means you're going to have some
of those fantastic deals, but you have some higher prices
as well, but we can't in our model, Mike. Our
model is all about lofares and value, and we see
New Zealanders really loving that second option here to fly

(05:18):
on much cheaper price, generally forty to fifty percent less
than our competitors. So it's important that we keep that
differential and that we keep offering that access to customers
to affordable travel.

Speaker 1 (05:29):
What's your view on this region? So, I mean it
doesn't apply as much to you as it does to quantits,
But there are certain parts of the world up through Asia,
up through the Americas into Europe, et cetera. Given the
Middle East is broken, do you see a demand boost
from people who see certain parts of the world as know,
more preferential to travel through at the moment than others.

Speaker 2 (05:48):
Yeah, I think I mean, at first of all, at
an overall perspective, because we track closely customers' intention to
travel and how they're prioritizing their spend, and we haven't
seen a hit to demand, and we still see particularly
Australians and New Zealanders, who we know love to travel.
We haven't seen any sort of erosion of that desire
to travel, which is fantastic. And then you do see

(06:10):
customers searching for other places. But we've also seen because
you've got the Middle East carriers so impacted. We've seen
particularly Unquantis, you know, cornices. European services have had a
positive impact because they are a desirable way to get
to those places. And you're still see Australians and New

(06:31):
Zealanders want to travel up to Europe in the upcoming holidays, etc.
You can still see that that demand is there and
it actually puts even more weight on Quantis's Project Sunrise
and the ability very soon to be able to go
NonStop from Sydney to London and for New Zealanders that
means one stop from Auckland, christ Church, et cetera to London.

(06:52):
So we're really confident in the sort of strategic decisions
we made that support an environment like this.

Speaker 1 (06:58):
Appreciate the insight and the catch up. Stephanie Tully, who
is the Jetstar CEO he throw I note, by the way,
have announced overnight their passenger numbers are down five point
three for the month Middle East is the issue gone
from seven point one million to six point seven Incredible numbers,
aren't they just think that's one month's worth of business
for an airport. One airport one month seven point one
down to six point seven million people demand though, and

(07:21):
this backs up with Stephanie was just saying demand for
travel remains strong despite the current price of fuel.

Speaker 2 (07:28):
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