Qantas pumps profits into massive 737 cabin refresh program

Qantas is set to pump a chunk of its half-year profit of more than $900 million into a game-changing upgrade of cabins across its fleet of Boeing 737-800s used on domestic and short-haul international routes, including to Bali.

The overhaul will include new business and economy-class seats, new larger overhead lockers with up to 50 per cent more space, and a full cabin refresh including new carpets, sidewalls and mood lighting.

Qantas on Thursday said the refresh would give passengers a modern, “as new” experience when flying.

But they will have to wait some time for that feeling, with the first of the 42 refurbished cabins not expected to be in service until 2027.

Qantas said the upgrades were part of the airline’s overall domestic fleet investment that will see the new Airbus A321XLR progressively replace the 737s over the next decade and more of the smaller A220s joining the fleet, with five new A220s currently in operation.

The carrier said the A321XLR offers more comfortable economy seats, a 66 per cent increase in business seats, a quieter flight, long and wide spacious cabin and extra-large overhead lockers.

Qantas chief executive Vanessa Hudson said the cabin upgrade programs across the group complemented the largest fleet renewal program in the airline’s history.

“Investing in our fleet is one of the most significant ways that we can transform the flying experience for our customers and make sure we’re consistently delivering a great journey,” Ms Hudson said.

“As we bring more new aircraft into our fleet, we are also making our existing aircraft look and feel like new.

“Previous cabin upgrade programs have delivered great outcomes for our customers, and allowed us to bring next generation designs and technologies to current fleet that reflect how our customers want to travel.”

Qantas has added 11 new aircraft and five mid-life aircraft to its fleet over the past six months. It has more than 100 new aircraft on order.

News of the upgrades came the same day Qantas unveiled a statutory net profit of $923m for the first half of the new financial year, up 6 per cent from a year earlier. Underlying profit came in 11 per cent higher at $1.39 billion on revenue of $12.13b, up 9 per cent and driven by a rise in international travel.

The result came despite a 6.6 per cent fall in normalised international airfares and only a marginal rise in domestic fares.

The airline said demand for travel remained strong across all customer segments, with Qantas and Jetstar’s domestic and international businesses delivering increased profitability carrying almost 10 per cent more customers — or 28 million passengers.

“Premium and corporate travel remained strong for Qantas while Jetstar carried a record number of customers in a high cost of living environment, with around one in three flying for less than $100,” it said.

The Flying Kangaroo also saw a significant jump in small business and corporate travel to lift domestic earnings to $647m, while the international division grew underlying earnings by 2 per cent to $327m.

Jetstar saw a record underlying profit before interest and tax of $439m.

Qantas’ powerhouse loyalty program also continued to deliver, reporting revenue of $1,3b, up 5 per cent, though underlying profits were down slightly.

Ms Hudson said the profit result highlighted the benefits of having both a premium and budget airline and a strong loyalty program.

She also noting the airline had more work to do to regain the trust of the public after it copped a barrage of criticism over poor customer service and sky-high airfare as services resumed after the COVID-19 pandemic.

“We’re seeing progress from the investments we are making for our customers and people but we know there’s more work to do to consistently deliver in the moments that matter,” she said.

“This is a key part of rebuilding trust and continues to be our focus.

“Australians have always loved to travel and continue to prioritise it over other spending options. Looking forward, we continue to see intention to travel from leisure and corporate customers remaining high.”

Qantas’ board also declared its first dividend in six years and will pay investors a fully franked dividend of 16.5¢ a share.