Qantas capacity up, Top End demand down

Qantas capacity is up for April 2015, while an overall drop in domestic capacity seems to work in favour of a controversial proposal to allow foreign airlines to operate domestic routes.

Qantas Group’s capacity has crawled upwards by 1%, while Group demand has jumped a further 2.2%, resulting in a revenue seat factor of 77.3%, almost 1% higher than the previous April.

Both Qantas and Jetstar International capacity increased in the month of April 2015.

Group Domestic capacity, which comprises Qantas Domestic and Jetstar Domestic, actually dropped lower than its previous corresponding period, in line with the mixed demand market.

Qantas Domestic capacity was lower in the month, reflecting adjustments in response to the resource market softness in both Western Australia and Queensland.

Jetstar Domestic, similarly, saw capacity reductions, which mirror the seasonal changes and fewer peak leisure travel days in April 2015.

Despite strong opposition, a controversial proposal to allow foreign airlines to fly domestic routes at Australia’s Top End is underway, due to be considered by cabinet in the next few weeks, according to SMH.

The move appears to come off the back of reduced capacity and demand up north, and would allow budget airlines such as Malaysia’s AirAsia and Singapore Airline’s Scoot, along with a swarm of other airlines, to land in the Top End market.

According to SMH, cabotage rules currently prevent a foreign airline from flying to an Australian city, picking up domestic passengers, and then flying to a destination elsewhere inside the country.

However, the ability to pick up domestic passengers would be appealing to a larger number of foreign airlines if it was extended to other parts of Australia, but Qantas, along with Virgin Australia, are leading the charge to fight the proposal.

If approved, foreign airlines would be allowed to fly between airports above the Tropic of Capricorn, including Cairns, Townsville, Darwin, Broome and Port Hedland, according to the SMH, with Trade Minister Andrew Robb and Treasurer Joe Hockey the biggest supporters.

The Northern Territory government is also supportive because it believes it would boost the number of flights.

Qantas’ former chief executive Geoff Dixon was reported by SMH as slamming the proposal, calling it “a step too far even for northern Australia,” as well as a form of dumping that would “seriously undermine” local airlines.

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