Qantas Blames Excess Domestic Capacity for Air Carrier’s Financial Woes
By Vittorio Hernandez | November 26, 2012 10:01 AM EST
Qantas Domestic Chief Executive Lyell Strambi blamed on Sunday the excess capacity in the country's domestic routes as the reason behind the air carrier's financial woes. He said the situation benefits passengers, but not the airlines.
John Borghetti, chief executive officer of the rival air carrier Virgin Australia, agreed that there were some adjustments in domestic capacity in the last few months and acknowledged that competition is very aggressive and will always be aggressive.
Mr Stambi made the comment at a media briefing at the Sydney airport to announce the shift of Airbus SAS A330s beginning May 2013 for all services between Perth and Sydney and Melbourne. The A330s will replace Qantas's Boeing 767s on east-west routes which will be transferred to the busier east-coast network, Mr Stambi said.
Virgin announced last week the addition of seats on routes between Australia's east and west coast as a result of the company's decision to switch to wide-body aircraft such as the A330 on these routes.
To worsen Qantas's worsening financial challenges, Virgin plans to purchase a controlling stake in Tiger Airways' Australian unit and take over Skywest Airlines which would give Virgin a larger slice of the domestic market to 35 per cent from its current 30 per cent.
Mr Strambi said Qantas decided to use the A330s for all its weekday services between Perth and Sydney and Melbourne to better serve business travelers who prefer more comfortable wide-body jets.
With the delivery of another A330 from the Airbus factory in Toulouse, France, Qantas would have nine such aircraft flying domestic trips, while the 21 others are B767s.
Meanwhile, Tiger confirmed on Sunday that Coffs Harbour would be its fifth new destination for 2012 and place on sale tickets beginning Monday, Nov 26. The discounted plane fare would be $59.95 one way between Sydney and Coffs Harbour.
By Feb 15, 2012, Tiger would have four weekly return flights between the two cities which would add 1,400 seats. By late March 2013, Tiger would add a fifth weekly service that would further hike the number of weekly seats between the two cities to 1,800.
To contact the editor, e-mail:
Most Popular Slideshows
- Taylor Swift Named Forbes' Second Highest Paid Country Musician [PHOTOS]
- Forever Lost: Indescribable Anguish for Malaysia Airlines MH17 Families, Remains of Some Victims May Never Be Found (PHOTOS)
- Global Aviation Accidents: UN to Form Safety Task Force, Gov'ts Should Share Intelligence Info to Avert Future Incidents on Flying Over Warzones (PHOTOS)
- PageSix: Beyonce & Jay Z Union is Not About Love, All About Business & the Brand
Join the Conversation
- New Malaysia Airlines Caught in Adelaide Airport Latest Scare
- Toyota Tops World Sales of Cars, Sells Over 5K Million Vehicles in First Half of 2014
- Formula 1 Chief Sues Google over Sex Party Pictures
- Air New Zealand Pays $1000 to NZ9 Passengers After Three-Night Delay
- Qatar's Surging Real Estate Prices Won't Affect Thriving Economy – Report
- Samsung Galaxy S5 Alpha Leaks Online: Release Date, Five Features to Wait for New Smart Phone
- Freshly Leaked Apple iPad Air 2 Cases Confirm Touch ID Sensor; Release Date, Limited Specs and Price Listed
- Photos of Motorola Moto X+1 Prototype and Specs Leak Online, Release Date, Four Fresh Features Revealed
- Moto X Android 4.4.4 KitKat Update Guide: Schedule and How to Install
- Sony Xperia Z3: Release Date, Five Features to Expect from New Android Smart Phone
- Top Surprising Features Of iOS 8
- Top 4 Reasons Why iPhone 6 Will Hit Big Soon After its Sept 2014 Release Date