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Post Market Wrap | Qantas Group Climate Action Plan released



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.  

Image: File

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.

"Michael Kodari is one of the world's most consistent, top performing investor. A philanthropist and one of the prominent experts of the financial markets, he has been referred to as ‘the brightest 21st century entrepreneur in wealth management' by CNBC Asia and featured on Forbes. Featured on TV as the "Money Expert", on the weekly Sunday program "Elevator Pitch", he is recognised internationally by governments as he was the guest of honour for the event "Inside China's Future", chosen by the Chinese government from the funds management industry, attended by industry leaders, when they arrived in Sydney Australia, on April 2014. Michael and George Soros were the only two financiers in the world invited and chosen by the Chinese government to provide advice, and their expertise on Chinese government asset allocation offshore. With a strong background in funds management and stockbroking, Michael has worked with some of the most successful investors and consulted to leading financial institutions. He was the youngest person ever to appear on the expert panel for Fox, Sky News Business Channel at the age of 25 where he demonstrated his skillset across a 3 year period forming the most consistent track record and getting all his predictions right over that period. Michael writes for key financial publications, is regularly interviewed by various media and conducts conferences around the world."

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When will airfares begin to fall?



As the global aviation market rebounds, airlines are changing their service offerings

Over 46 million workers in the global aviation sector lost their jobs as global aviation came to a grinding halt at the onset of the pandemic.

However, Geoffrey Thomas from said passengers have returned to airport terminals and boarded flights in droves.

“When travelled returned, many of us wondered what sort of low airfares will we have to be charged to entice people back onto airplanes.”

In February 2023, total traffic (measured in revenue passenger kilometres) rose 55.5 per cent when compared to February 2022.

Globally, traffic is at 84.9 per cent of February 2019 levels.

“It was a stampede, the likes of which we have never seen before,” Mr Thomas said.

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The worst of inflation could be behind us



The unprecedented nature of the pandemic continue to shape international fiscal policy

As reserve banks and federal reserves continue to battle the impacts of Covid-19, inflation has become a dominate issue.

In some parts of the world, rising household costs have slowed consumer spending by more than expected.

It means the end of aggressive rate hikes could come to an end in a matter of months.

In Australia, recent data from the Australian Bureau of Statistics confirmed inflation has passed its peak and is beginning to moderate.

The numbers show annual inflation peaked in December 2022 but will still remain higher for longer than anticipated.

Matt Grudnoff is a Senior Economist at The Australia Institute, who said these are uncharted waters.

“I don’t think they should be fully blamed.

“The pandemic was an entirely different kind of recession, one that we have never seen before.

“The world went into recession because the world shut down for very good health reasons.

“But the economy rebounded extremely quickly, simply because there was no underlying problem with the economy,” he said.

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“I think there is a great risk”: will AI steal our jobs?



Artificial Intelligence has become an increasingly powerful and pervasive force in our modern world.

Artificial intelligence is not a new concept. However, the growing advancements have the potential to revolutionise industries, improve efficiency, and enhance the quality of life.

Along with its promising advancements, artificial intelligence also brings certain risks and challenges that must be acknowledged and addressed.

It has become the focus of lawmakers, who are working towards greater regulation of the sector.

U.S. and European Union officials recently met in Sweden to weigh up the benefits and challenges of artificial intelligence, and other emerging technologies.

“The AI process is creeping up on us,” said Dr Keith Suter, who is a global futurist.

“You’ve got competition between companies.”

It’s almost like some of us can see this raft that’s heading towards the rapids and a disappearance towards the waterfall, and we’re giving a warning but it’s not being heeded because everybody’s in this race to get down to the river,” Dr Suter said.

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