Qantas is moving forward with its Project Sunrise initiative, aiming to launch non-stop ultra-long-haul flights from Australia's east coast to destinations like London and New York by October 2027. The airline expects these flights, operated by 12 specially modified Airbus A350-1000ULR jets, to contribute $400 million in earnings (EBIT) annually by around fiscal year 2030, once all aircraft are in operation. This financial target is set against a backdrop of increasing fuel costs, with Qantas projecting its fuel bill could reach $3.3 billion this year.
The business case for Project Sunrise is predicated on attracting passengers willing to pay a premium for the convenience of non-stop travel, saving an estimated three to four hours compared to one-stop alternatives. Qantas anticipates a circa 20% yield premium relative to its existing operating fleet, and UBS analysts observe an assumption of over a 30% uplift in Revenue per Available Seat Kilometre (RASK) for these new routes. This RASK premium is expected to be supported by a higher proportion of premium cabins, with a 41% premium cabin mix contributing two-thirds, and higher ticket prices accounting for the remaining one-third.
To achieve the targeted premium, the A350-1000ULR aircraft will feature a smaller capacity of 238 seats, a significant increase to a 41% premium mix (non-economy seats) from the current approximately 30%. This configuration includes first, business, and premium economy classes, with dedicated "wellness" spaces for economy passengers. While eliminating stopovers saves on landing fees, the ultra-long flights incur a higher relative fuel bill, as a substantial portion of the fuel load is used simply to lift the weight of the rest of the fuel. Analysts like John Strickland emphasize the need for Qantas to secure a price premium across all cabin classes, not just business, to make the project viable.
Analysts have noted some skepticism regarding the ambitious earnings targets, especially given the lack of detailed color on how these goals will be achieved amid higher fuel costs and strong premium cabin demand. Morgan Stanley estimates that consumers will pay a 15%-20% ticket price premium for the time savings. Citi assumes a load factor of 85%, which is comparable to, or better than, the larger A380s. The considerable fleet capital expenditure must be monetized over time to ensure the project's viability. The first route, Sydney-London, is expected to take between 19 and 22 hours, eliminating the stopover on the fabled Kangaroo Route.
