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The battle for control of Australia’s skies post-COVID stepped up a notch after Qantas announced it was to start flying Canberra routes only recently launched by smaller airlines.
Qantas will now compete with Alliance to fly between the ACT and the Sunshine Coast from 19 November; and fight with Link to service a route between Canberra and Hobart from 4 December.
Alliance launched the first-ever commercial flight between the Sunshine Coast and Canberra on 23 October, following Queensland’s decision to reopen its border to the ACT on 25 September.
Meanwhile, Link Airways operated its first flight between Canberra and Hobart on 5 November. The service was due to start on 3 December, but launched earlier when Tasmanian Premier Peter Gutwein opened the border with the ACT on 26 October.
The flights will depart Canberra at 9:30am and arrive into Hobart at 11:35am, while the return service will depart Hobart at 12:05pm and land in Canberra at 2:05pm.
Last week, Australian Aviation reported how Virgin applied to the ACCC to collaborate with Alliance on 40 regional routes to safeguard its market share against Qantas.
The airline argued it would be hard to serve smaller towns with its post-administration, stripped back fleet and ceding to Qantas could result in more expensive fares for passengers.
The deal between Virgin and Alliance would include sharing cost information, agreeing capacity, and collaborating on flight schedules.
In August, Virgin Australia announced plans cut 3,000 jobs and significantly downsize its fleet.
The new network will operate a 737 mainline fleet for domestic services but removing ATR, Boeing 777, Airbus A330 and Tigerair Airbus A320s. Its regional and charter fleet will also be maintained.
Alliance, meanwhile, recently received the first of 14 new Embraer E190s to add to its existing collection of 24 Fokker F100, 13 Fokker 70LRs and five Fokker 50 turboprops.
The ACCC’s report on the proposals states: “Virgin Australia has already announced that it will cancel a number of regional services for the foreseeable future due to depressed demand, unsustainable load factors, and the unsuitability of Virgin Australia’s proposed Boeing 737 fleet for routes with limited demand and which cannot be serviced using VARA’s Western Australia-based F100 fleet. Virgin Australia sees the proposed conduct as the most effective way to service the relevant routes and continue to serve these cancelled routes, in partnership with Alliance Airlines.
“If Virgin Australia does not have a presence or retain its slots on these routes, it will be increasingly more difficult for it to re-enter in the future, strengthening the position of the remaining competitors and ceding market share and reach to Qantas. This may result in more expensive airfares, less favourable terms and conditions, reduction in quality of in-flight services and a reduction in the number of flight options (routes and frequency) available to consumers.
“The ability for Virgin Australia to offer a full network of services, but to do so without sustaining operational losses, is crucial to its ability to restore confidence in its services and brand as it comes out of voluntary administration.”
Gary
says:Qantas is a Corporate bully…plain and simple…
Vannus
says:VA couldn’t care less about pax. The ‘ceding to QF’ is a smoke-screen.
The REAL issue is losing routes & slots.
Bain hasn’t even legally bought it yet, so IF it bails, there’ll be nothing for VA to worry about, as it will be liquidated.
Peter
says:Hey Adam
You should do a story on the massive growth of QF/QFLink in Tassie as well…
Hobart is getting new direct services on QF/QFLink to Perth, Brisbane, Canberra, Adelaide
Launceston is getting new direcrt services on QFLink to Sydney
Also for you to check with QF – rumours are they will upgauge Launceston-Melbourne from Q400’s to 717’s in anticipation of the Christmas rush once borders open between TAS and VIC on Dec 1
Ben
says:As a Canberran this is good news, but I’m pretty cynical about the timing of this and Qantas’ real motives. I mean, they haven’t serviced Hobart or the Sunshine coast in the 14 years I’ve lived here but they miraculously decide to start two pretty thin routes in arguably the worst downturn in aviation history, straight after two minnows announce new routes. Hopefully Qantas don’t pull out shortly after they inevitably force their two weaker competitors off the routes…
Andrea Shearer
says:I hope the ACCC are going to keep a close eye on the aviation sector, as instructed by the Federal government. I just wish Alan Joyce would realise that his way of business is not what Australians expect of Qantas and what it represents.
John Hardpoint
says:Qantas can be real bullies to the smaller guys. Taking on Rex on Merimbula, Orange and Kangaroo Island. Now an even lower blow moving in on Links innovative new service between Hobart and Canberra. No doubt the smaller guys will be forced out and prices will soar for regional communities, all the while QF will roll out the red carpet promising “more choice” for these communities. In this market it simply becomes a strategy of attrition… who can sustain losses for the longest, the small independent carrier or the cash rich giant. Once the small guy is weeded out, expect less services at higher prices. ACCC where are you?
Steve A
says:You talk about the ethics of Qantas muscling out the smaller guys off routes that they commence?
Surprisingly, the word ‘ethics’ doesn’t appear in Qantas management’s vocabulary.
This is how Qantas treats competitors, not just now, but always. Remember, Virgin, who nearly disappeared because Qantas threw $7 or 800 million
Qantas treats its shareholders the same way. It never paid them a dividend for seven consecutive years, remember? And the average annual dividend of just 8cps has been paid to shareholders during the Joyce years.
And Qantas has made a combined loss of about a billion dollars in the past 12 Joyce years too. That’s an average annual loss during his leadership of $80 million.
Add to this asset-stripping during the same time of about the same amount of valuable assets sold off, and you wonder why the Qantas Board of Directors doesn’t get off its collective chuff and actually step in to do its job of looking after shareholder’s interests?
The asset-ageing of the fleet is even worse reading.
Not much joy at Qantas for shareholders, is there?
And Mr Joyce has suffered badly too. He only averaged a measly $8 million each year for the last 12 years. I mean, who would demean themselves to work for that little? And the Businessman of the year award too, of course. Oh, and the gong too.
Now he’s looking to get rid of 2,500 more workers to save $100 million over 7 years or so. This, this, this, this is after all 3% of what Mr Joyce squandered on share buy backs over recent time.
Qantas has treated pilots the same way too, remember? Take this pay offer or we will bring in pilots from overseas to do the job, Alan Joyce told his long-haul pilots.
And his side-kick Gareth Evans told Jetstar pilots the same thing. Accept this pay offer or we will sell Jetstar’s B788’s so that you are no longer needed.
And in 2012, Alan Joyce did the same to British Airways. Joyce dumped BA and their long-standing partnership agreement to cosy up to Emirates.
‘Ethics’ at Qantas? Yeh, right! Oh, oh, oh oh there’s a pig flying around. Could be, because I’ve seen flying kangaroos
Is it just me, or does someone else see what I see?
Bernie
says:Qantas has had years of opportunity to fly Canberra-Hobart yet does not until a small airline takes the risk and starts it. Talk about predatory practices! QF are a nasty piece of work!
Vannus
says:To Steve A, above…….
Yet another vitriolic rant against QANTAS, by you.
That comment is just hate against the Company, which is such a disgusting thing to do.
QANTAS, or its’ people, must’ve done ‘something’ to you for this outpouring of your misery.
There’re many, many good employees’ who’ve contributed multi-decades’ to QANTAS with hard work, who truly love working there, & to read your comment is very saddening to them.
Shame on you!
TD
says:All is fair in business. Virgin has done similar in the past especially in WA. VARA was created as Skywest was consumed by Virgins tenticles and then Rex came in on the undercut as a subsidy feeder displacing others. Typical aviation gaming. Its only a matter of time before alliances and subcontracting between all the new players after a period of disintegration for some will begin.
TD
says:All is fair in business. Just ask Bain. Virgin has done similar in the past especially in WA. VARA was created as Skywest was consumed by Virgins tenticles for operational wins and then Rex came in on the undercut as a subsidy feeder displacing others who built up the air services for West Aussies .Typical aviation gaming. Its only a matter of time before alliances and subcontracting between all the new players after a period of disintegration for some will begin.