This Post Market Wrap is presented by KOSEC – Kodari Securities

• Targeting 25 percent reduction in greenhouse emissions by 2030
• Sustainable Aviation Fuel can reduce greenhouse emissions by 80 percent
• Sustainable Aviation Fuel is produced from sugar cane, forestry residues and animal tallow
• Zero use of single-use plastics by 2027
• Modernised fleet can burn 15 percent less fuel and improve fleet efficiency by 1.5 percent per year.
• Sustainability reporting is good for business and explains why Qantas is one of the world’s best managed airlines.   

Qantas, founded in 1920, has been flying passengers internationally since 1935 and is today the world’s third largest airline, with seamless connections to over one hundred global destinations. As Australia’s flagship carrier, Qantas has an approximate 65 percent domestic market share, and operates in a competitive duopoly with Virgin Australia. 

Qantas Group Climate Action Plan

The Qantas Group Climate Action Plan (Plan) released today makes sustainability the basis of decision making across all areas of the business. This includes integrating climate change issues into the Group’s financial framework and linking performance against targets to executive remuneration, including factoring in a cost of carbon in financial decisions. The Plan outlines the Group’s interim targets and initiatives to achieve a 25 percent reduction in greenhouse emissions by 2030.

Sustainable Aviation Fuel (SAF) 

Qantas is driving the development of the sustainable aviation fuel industry in Australia. This initiative is aimed at taking the fuel mix of Qantas flights to 10 percent use of SAF by 2030 and to 60 percent by 2050. This initiative is critical for reaching its net zero emissions target under its market-leading carbon offsetting program. Australia already produces feedstock for SAF that is exported to overseas producers. The feedstock is produced from sugar cane, cooking oil, forestry residues, and animal tallow, before being blended with normal jet fuel. The blended fuel produces up to 80 percent less greenhouse emissions, compared to traditional jet kerosene. Qantas sees value in building a domestic bio-fuels industry, creating jobs and fuel security in Australia. To this end, Qantas has committed $50 million towards the establishment of an Australian-based SAF industry. Today, 15 percent of fuel used out of London comprises SAF and a supply deal has been signed for 20 million litres annually of blended SAF out of Californian airports from 2025.  

Waste Reduction

The airline aims to achieve zero single-use plastics by 2027 and zero general waste to landfill by 2030. This means that every Qantas flight will eventually use products in compostable or recyclable packaging. Qantas anticipate that by 2030, all of its Australian-based operations will be completely free of general waste. 

Fuel Efficiency 

A modernised fleet and more efficient flight planning can burn 15 to 20 percent less fuel and improve fleet efficiency by an average of 1.5 percent per year. Qantas is also undertaking research into hydrogen and battery power. However, it is acknowledged that hydrogen or electric powered aircraft are several decades away.  

Carbon Offsets

The offsetting program will continue, especially into key Australian projects. Qantas has entered into a Memorandum of Understanding with ANZ and INPEX for a major reforestation and carbon farming project in Western Australia’s wheatbelt region. The Qantas Fly Carbon Neutral carbon offset program has one of the highest participation rates of any airline in the world.  

Brand Power

Qantas understands the value of a reputable consumer brand and by leading the decarbonisation of the aviation industry, it is strengthening the airline’s consumer brand power. Its proactive response to climate change is well documented in its sustainability reporting to stakeholders and this gives the airline its licence to maintain and grow over the long-term.

Qantas recognises that managing sustainability and transparently reporting this to stakeholders is fundamental to protecting brand value. It isn’t just good for the planet; it’s also good for business, and this partly explains why Qantas is one of the world’s leading and best managed airlines. 

This Post Market Wrap is presented by Kodari Securities, written by Michael Kodari, CEO at KOSEC.