sydney: What We Know

Generated Title: Qantas's "Project Sunrise": A 22-Hour Flight to Nowhere?

Qantas is making headlines again, this time with "Project Sunrise," their ambitious plan to connect Sydney to London and New York with non-stop flights by 2027. The airline just released images of its A350-1000ULR, currently in production in Toulouse, France. Twenty-two hours in the air, cutting four hours off current travel times? Sounds impressive, but let's dig into the numbers and see if this venture is set to soar, or destined for a nosedive.

The Allure of Non-Stop...and the Cost

The appeal is obvious: shaving off four hours on those ultra-long-haul routes is a big deal for time-strapped executives and anyone else who values their sanity. And Qantas has some experience here, already flying direct from Perth to London since 2018 using Boeing Dreamliners.

But here's where my analyst senses start tingling. Qantas expects domestic revenue to grow by about 3% in the first half. That's at the lower end of their guidance range from August. International revenue forecast remains unchanged at 2-3% growth. Loyalty program growth is apparently "strong and on track," but they don’t quantify that. What gives? If demand for long-haul flights is so high, why isn't it reflected in their broader revenue forecasts? Is "Project Sunrise" a solution searching for a problem, or a carefully calibrated response to genuine demand?

The airline also notes that while leisure travel remains strong, businesses outside the resource sector are flying less than expected. So, the very demographic likely to pay a premium for non-stop flights is pulling back. That’s a discrepancy that demands closer scrutiny. Are they banking on leisure travelers willing to endure 22 hours in the air, or are they anticipating a rebound in corporate travel that hasn't materialized?

The High-Speed Rail Gambit

And while everyone's distracted by Qantas's sky-high ambitions, let's not forget what's happening on the ground. The Australian government just greenlit the next phase of the high-speed rail project linking Sydney and Newcastle. The goal? To slash travel time between the two cities from two hours, forty minutes to about an hour.

Now, consider this: the initial stage of the rail project, including stations in Broadmeadow, Lake Macquarie, and the Central Coast, is slated for completion by 2037, followed by Central Sydney in 2039. By 2042, the line extends to Western Sydney Airport via Parramatta.

Here's the kicker: the rail line eventually aims to connect Brisbane with Melbourne. The timeline is ambitious, to say the least. But if successful, what does this do to the long-term viability of domestic flights? If you can hop on a train and travel between major cities in a fraction of the time, will people still opt for the hassle of air travel?

I've looked at hundreds of infrastructure projects, and the timelines always seem... optimistic.

The projected tunnel diameter between Sydney and the Central Coast will prevent trains from traveling above 200 kilometers per hour. But trains could reach maximum speeds of 320kph between the Central Coast and Newcastle. That's a significant difference. Why not build the entire line to accommodate higher speeds? Is it a cost issue, or are there geological constraints at play? High-speed rail business case linking Sydney and Newcastle supported by government assessment body

The Real Flight Path?

Qantas CEO Vanessa Hudson claims this aircraft "will change what's possible when it comes to international point-to-point air travel." A bold statement. It's like saying a faster horse will revolutionize transportation in the age of automobiles. While Qantas focuses on connecting Australia to the world, perhaps they should also be looking at the changing landscape within Australia. The numbers suggest a future where domestic air travel faces increasing competition from high-speed rail. What’s their contingency plan?

So, What's the Real Story?

"Project Sunrise" might be a dazzling feat of engineering, but it's also a bet. Qantas is betting that the demand for ultra-long-haul flights will remain strong, and that high-speed rail won't steal its domestic thunder. My analysis suggests that the odds aren't as favorable as they might seem.