Sustainability

As a company that’s been around for 96 years, Qantas is used to looking at the big picture. In that time, we’ve seen massive economic and technological advances and responded by transforming and adapting our business, setting milestones for the aviation industry along the way.

So when we think about sustainability today, we define it in simple terms. It’s about taking actions now to ensure we can succeed and grow for the decades ahead: building value for our shareholders; creating great jobs for our people; providing world-class service for our customers; and making a positive impact on the environment and community.

The Qantas Group’s approach to creating and protecting long-term value rests on two strategic pillars: Foresight and Accountability

Foresight

We define foresight as thinking objectively about opportunities and risks over the horizon.

Global forces external to Qantas are changing the environment we operate in now, and the pace and scale of that change is increasing.

In 2016 we challenged ourselves to consider which global forces were most relevant to our business in a 20-year context. And through engagement with investors, suppliers, industry partners and sustainability experts, and interviews and workshops with leaders from across the Qantas Group, we identified the four most material forces to Qantas, and assessed how the group was positioned against each.

As we look ahead, our understanding of these global forces will inform the strategic priorities we set to mitigate risk and maximise opportunities over the short, medium and long-term.

New versus old powers

Few industries are greater beneficiaries of international connectedness than aviation. That means that changes in the global economy and shifts in the geopolitical balance of power have a significant impact on the industry's development.

For airlines today, the dominant geopolitical trend shaping the future is the rise of Asia. Asia-Pacific is already the world's biggest aviation market. By 2035, it will be bigger than Europe and North America combined. To convert that potential into profitable growth, airlines need to build the right network links, attract the best people, and begin to forge strong partnerships across the region.

  • Between 2009 and 2030 the global middle class will increase from 1.8 billion to 4.9 billion.

  • By 2030, Asia will represent 66% of the global middle-class population and 59% of middle-class consumption.

  • Over the next twenty years, four of the five fastest-growing markets will be in Asia. In China the market is forecast to grow by 817 million passengers, to a total of 1.3 billion passengers per year in 2035. In India 322 million new passengers will boost the total to 442 million per year in 2035.

Statistics

  • By the same time, China is expected to have 16.9 billion passengers followed by India (367 million passengers).
  • Between 2009 and 2030 the global middle class will increase from 1.8 billion to 4.9 billion.
  • Over the next twenty years, four of the five fastest-growing markets will be in Asia. In China the market is forecast to grow by 817 million passengers, to a total of 1.3 billion passengers per year in 2035. In India 322 million new passengers will boost the total to 442 million per year in 2035.

How Qantas is responding:

Half the Qantas Group's international network is now dedicated to Asia, compared with 30 per cent just a decade ago.

Qantas has restructured its network to focus on the business and premium leisure market between Australia and Asia, growing capacity and expanding strategic partnerships, including a new joint venture with China Eastern. Jetstar is opening up Australia-Asia and intra-Asia leisure travel markets through a combination of its Australian operations and associate airlines across the region. Our freight business is responding to booming trade ties by diversifying the range of goods it transports as demand for premium Australian products grows. And across the Group, we're investing in Asian language skills, sales and marketing channels.

We're taking a long view of Asia's potential, putting in place the foundations now to capitalise on long-term growth in demand.

Emerging possibilities

The rise of digital connectivity and big data has been called a new industrial revolution. For airlines, it's already reshaping everything from flight planning systems to customer service and distribution channels - with the most profound changes still to come.

In the short-term, this digital revolution requires airlines to invest in new technologies and digital skill-sets. Over the longer term, it means airlines will have to become agile, digitally-literate businesses capable of harnessing technological breakthroughs that may not even have been conceived yet. For airlines that get it right, the opportunities are immense.

  • In 2012, 8.7 billion devices were connected by the internet of things with the number set to increase to 50 billion by 2020.

  • Two thirds of the world’s population has a mobile phone, up from 3 per cent 20 years ago.

  • Facebook population is larger than any country.

Statistics:

  • In 2012, 8.7 billion devices were connected by the internet of things with the number set to increase to 50 billion by 2020.
  • In 2016, Qantas will trail the delivery of more than 200 hours of inflight entertainment options to passengers via iPads provided in each seat of a dedicated B767-300 aircraft.
  • 40 to 50 per cent of Qantas’s marketing budget is now ploughed into digital and social media.
  • Two thirds of the world’s population has a mobile phone, up from 3 per cent 20 years ago.
  • Facebook population is larger than any country.

How Qantas is responding:

The Qantas Group's investment in digital and data capability is about creating a better experience for customers through personalisation, driving new efficiencies into our operations, and broadening our Group's earnings base beyond the core aviation business.

In our operations, we are using predictive analytics to increase fuel efficiency through 4D flight planning, and to resolve passenger disruptions far more rapidly. For our customers, we are investing in a booking, travel, and customer support experience that is digitally-enabled from end to end, and capable of customisation along the way. And at Qantas Loyalty, we're launching new digitally-led businesses in health, financial services and retail that match our customers' needs and provide new avenues for growth.

Tomorrow's people

Future generations of consumers and employees will expect more of business and interact with companies in fundamentally different ways than their parents' generation.

As Generations Y and Z become a majority of the global workforce, their spending power and influence will grow, and the choices they make will increasingly be determined by a company's values and social impact as much as its products and services.

Businesses that provide meaningful jobs and opportunities, embrace innovation, and have a voice on social issues will be well placed to attract talent and win new customers as demographic change picks up pace.

  • By 2020, more than 50% of the workforce will be members of Generations Y or Z and 80% want to work for companies that care about their social impact.

  • By 2020 the number of women in the workforce is expected to grow to 77,232,000, an increase of 6.2 percent from today.

Statistics:

  • By 2020 the number of women in the workforce is expected to grow to 77,232,000, an increase of 6.2 percent from today.
  • Millennials - already have $200 billion of annual spending power
  • By 2020, more than 50% of the workforce will be members of Generations Y or Z and 80% want to work for companies that care about their social impact.

How Qantas is responding:

We recognise that highly skilled and engaged people are our greatest asset, and we're planning now for the workforce we'll need in the future.

Our dedicated Talent Advisory Group identifies future senior leaders of the Group and makes sure they're provided with the training and development support they need to succeed - with a particular focus on emerging female leaders. We also continue to invest in the next generation of aviation employees through our corporate graduate and engineering apprenticeship programs and our internship partnership with Career Trackers focused on Indigenous talent - some of the most sought after programs of their kind in Australia.

Of course, attracting the right talent is as important as developing it - which is why our brand and community partnerships strategy reflects our values as an open, inclusive company, the role we play in the community, and our commitment to fostering innovation both internally and externally. At the same time, we're constantly expanding our reach on social media channels to reach wider audiences and have better conversations with potential employees - and potential customers.

Planetary boundaries

Human-induced climate change and resource scarcity is impacting natural environments and communities around the world, influencing consumer behaviour, and reshaping government policies and regulation at a global and local level. Limiting the rise in global temperatures below 2 degrees above pre-industrial levels is a global priority.

Aviation has been in the front line of the global business response, becoming the first industry to voluntarily commit to emissions targets out to 2050 and agree to a global regulatory scheme to come into force from 2021 under the United Nations body for aviation – the International Civil Aviation Organisation (ICAO). The ongoing challenge for individual airlines is to find more efficient ways of using fuel and harnessing new technology to cut emissions and - ultimately - bring biofuel production up to commercial scale.

Alongside the fight against climate change, airlines have a broader role to play in advancing sustainable development, working with communities to make a positive social impact throughout the industry's supply chain.

  • In 2015, flights produced 781 million tonnes of CO2 with the aviation industry being responsible for 2% of CO2 emissions globally. If commercial aviation were to get 6% of its fuel supply from biofuel by 2020, this would reduce its overall carbon footprint by 5%.

  • The global demand for biofuels will hit 172 billion litres by 2020, up from 81 billion litres in 2008. At current production levels, an additional 40 million hectares of land would have to be converted to growing crops for biofuel.

  • New technologies will make alternative energy sources more viable. Prices of lithium ion battery storage are forecast to fall 48% from $350 per kilowatt hour to $182 per kilowatt hour by 2020.

Statistics:

  • In 2015, flights produced 781 million tonnes of CO2 with the aviation industry being responsible for 2% of CO2 emissions globally. If commercial aviation were to get 6% of its fuel supply from biofuel by 2020, this would reduce its overall carbon footprint by 5%.
  • The global demand for biofuels will hit 172 billion litres by 2020, up from 81 billion litres in 2008. At current production levels, an additional 40 million hectares of land would have to be converted to growing crops for biofuel.
  • Prices of home battery storage (Lithium ion batteries) are forecast to fall 48% from $350 per kilo watt hour to $182 per kilo watt hour.
  • According to the Intergovernmental Panel on Climate Change, global warming of more than 2°C can have an increase in the number of extreme climate events. In Copenhagen in 2009, an agreement was reached to limit global warming to 2°C between now and 2100. To reach this target, global greenhouse gas (GHG) emissions need to be reduced by 40-70% by 2050 and that carbon neutrality (zero emissions) needs to be reached by the end of the century at the latest.

How Qantas is responding:

Climate change and resource scarcity are global challenges that demand a coordinated response from governments, businesses and individuals, and we are committed to leading the way in that response.

We're guided by a simple philosophy: Measure, Reduce, Offset and Influence. We're using innovative data analytics to quantify our impact; renewing our fleet with the industry's most advanced aircraft; engaging our people in fuel optimisation and playing a lead role in research towards a commercially viable aviation biofuel market.

At the same time, we are engaging our employees, customers and the community through the world's largest airline carbon offset program, committing to stringent energy efficiency targets and supporting the growth of sustainable tourism in Australia, while multiplying the impact of all these initiatives by forming partnerships with regulators, manufacturers, and innovation leaders, from Airservices Australia to GE and Tesla.