A report in The Sydney Morning Herald says that Qantas has signalled a “whatever it takes” attitude to defending market share and will cut fares and expand its fleet ahead of the looming airfare war.
The group’s low-cost offshoot, Jetstar, is offering some 10,000 $1 fares on several regional routes from Sydney, Melbourne, Brisbane and Adelaide to its email subscribers, with Jetstar CEO pointing yesterday to Jetstar’s existing $39 Melbourne- Gold Coast fare to show how vigorously the Qantas group would defend its 65% market share.
“We’re the only carrier that’s introduced single-digit airfares – other carriers have promised it, but we have a $1 airfare that went on sale today with 10,000 seats, we’ve had $3 airfares with 30,000 seats,” he said.
The Singapore Airways-backed Tiger announced its own Melbourne-Queensland low fares, offering $49.95 tickets to the Gold Coast and $59.95 to Rockhampton and Mackay.
Tiger CEO Tony Davis rejected suggestions the low-cost entrant was reacting to Jetstar, saying, “It’s the others who are running round like headless chickens.”
“You’ve got to ask who’s reacting to who?”
“Anyone can offer a gimmick fare for a couple of hours to a selected group of users.”
A Virgin Blue spokeswoman dismissed the offerings from both competitors.
“Whether it’s Tiger or Jetstar, we know a good PR stunt when we see one and we hope they sell all their fares at $1 or $49,” she said, adding, “Virgin Blue introduced low fares to this market seven years ago.”
The fare announcements came shortly after Qantas decided to significantly expand capacity, with Qantas announcing on Saturday it would buy 20 more Boeing 787 Dreamliners than originally anticipated, taking its total purchase to 65.
The first Dreamliner to be built was unveiled by Boeing outside Seattle on Sunday, with Mr Joyce saying the first 15 Dreamliners would be used to expand Jetstar’s international fleet, but from 2010 they would revert to Qantas for use on domestic routes.
Centre for Asia Pacific Aviation director Peter Harbison said moving the 787s to domestic routes was a clear warning to rivals that Qantas would defend its market share.
Report by The Mole
