Qantas vs Virgin: who will win?
![Qantas vs Virgin: who will win?](https://www.travelweekly.com.au/wp-content/themes/bandtv1/img/default.png)
In the fierce turf war for Australian aviation domination, the Flying Kangaroo still stands atop the podium. But for the first time in the carrier's recent history, Qantas is under threat of coming off second best.
The struggle between Qantas and Virgin Australia is an ongoing saga, but the competition intensified last month as both airlines revealed their financial results. Qantas laid down its hand first, reporting a $244 million loss and cancelling firm orders for 35 Boeing 787s. Virgin Australia, on the other hand, responded with a healthy $22.8 million profit.
Chief executive Alan Joyce blamed the airline's beleaguered international operations, record fuel prices and a $194 million bill from last year's industrial relations dispute for the loss. Meanwhile, Virgin Australia chief executive John Borghetti had no need to defend the figures, insisting that the results prove his plan to crack Qantas's dominant position is making headway.
Not only has Virgin returned to profit, but Borghetti's scheme to woo business travellers with refurbished lounges and a new frequent flyer program has borne fruit. Since the debut of domestic business class last year, the airline has met its target of achieving 20% domestic revenue from the corporate and government market one year ahead of schedule.
THE NEW REALITY
Qantas defiantly maintains it is on the right track, but Virgin's figures have many questioning whether Qantas's grip on the domestic market is slipping.
Macquarie Group transport equity analyst Russell Shaw seems to think so. While Qantas does maintain the lion's share, with 65% of capacity and 84% of premium traffic, he said market share at the front end has slipped by between 5% and 10%. But as Virgin muscles in, he said it's unlikely Qantas will relinquish its spot. "Qantas is facing increased competition from Virgin, but it is unlikely that Qantas's share of capacity will dip too far below 65% as they are very determined to keep this level by adding further capacity as, and when, their competitors do," he told Travel Weekly.
The figures prove Qantas is hurting from high fuel prices and weak inbound passenger demand. But Strategic Aviation Solutions chairman Neil Hansford said they are a clearer indication that Borghetti is on the right track. After ironing out Virgin's creases as a discount model, he's fundamentally remade the airline within two years of coming onboard. Having spent decades at Qantas before missing out on the top job to Joyce in 2008, Borghetti certainly knows his product. He also knows Qantas's soft spots and is hungry to win.
THE RESPONSE
Qantas has shrugged off concerns that Borghetti will step on its toes, and is bullish about retaining 65% domestic market share. But while its international arm continues to flounder, analysts are questioning whether Qantas would be better off ditching it altogether. Describing Qantas International as a "business going nowhere", Hansford said this operation is taking the gloss off its shining domestic business.
Joyce, however, is committed to making it work. Convinced it is critical to the business on a whole, he is determined to make it work, regardless of the trials ahead. "We believe that Qantas international is a core part of our business. It is very important that we focus on turning it around," he said. "There's no easy fix, no exit here that's going to solve it¬ but we are committed to it and believe we are on track to deliver."
MAKING IT WORK
The good news for the travelling public is that the turf war spells lower fares across the board. After revealing its record loss last month, Qantas announced it would boost domestic flights by 11% over the next four years. Not one to rest on his laurels, Borghetti responded with a 9% increase of his own over the next six months.
Macquarie Group expects customers to be the biggest winners over the next few months, with airfares between Sydney, Melbourne and Brisbane to fall several percentage points as capacity increases. Ticket prices from the east coast to Perth will also soften, with Hansford noting that Australians will "never have seen it so good".
Experts agree that the competition will step up as Virgin continues its push into the premium business market, but they also believe Qantas's dominant position is safe – for now.
Email the Travel Weekly team at traveldesk@travelweekly.com.au
aviationLatest News
![](https://www.travelweekly.com.au/wp-content/themes/bandtv1/img/default.png)
Low-cost Indian carrier SpiceJet continues to burn cash
It’s not just low-cost Australian carriers that are facing hardship. SpiceJet, India’s version of Bonza, recently announced a 72 per cent reduction in its net loss versus last year. But, despite this improvement, the airline has posted losses for six straight years. But it has secured board approval to raise up to INR 30 billion […]
![](https://www.travelweekly.com.au/wp-content/themes/bandtv1/img/default.png)
SAKA Museum recognised in TIME magazine’s World’s Greatest Places 2024
AYANA Resort Bali’s newly-opened cultural and events centre, SAKA Museum has been recognised in TIME magazine’s World’s Greatest Places list for 2024. Part of AYANA Bali’s resort destination, the museum integrates Bali’s rich history with state-of-the-art facilities, making it the centrepiece for the island’s spiritual and cultural heritage. TIME magazine’s inclusion of SAKA Museum in […]
![](https://www.travelweekly.com.au/wp-content/themes/bandtv1/img/default.png)
Journey Beyond launches first brand-led campaign during Paris Olympics
Journey Beyond is pushing the boundaries. On The Ghan, you can't even see them!
![](https://www.travelweekly.com.au/wp-content/themes/bandtv1/img/default.png)
Ascott Australia partners with Hotels for Trees
Hoteliers can take a 'Lyf' out of this book and improve their green credentials.
![](https://www.travelweekly.com.au/wp-content/themes/bandtv1/img/default.png)
Victoria’s TAC Top Tourism Town Award winners for 2024
Keep looking in our own backyard. There are plenty of places to go.
![](https://www.travelweekly.com.au/wp-content/themes/bandtv1/img/default.png)
Uniworld partners with Camilla Franks with Egyptian-inspired collection
We are in de-Nile about making puns combining Crocs and leopard prints, given this luxe partnership.
![](https://www.travelweekly.com.au/wp-content/themes/bandtv1/img/default.png)
Aussies at Paris Olympics anxious about travel risks, with incidents already recorded
Fortunately one of our biggest gold medal hopes still held onto his pedals.
![](https://www.travelweekly.com.au/wp-content/themes/bandtv1/img/default.png)
Banyan Tree Seaview Villas elevates Laguna Lang Co
If you've ever played golf in the tropics, start early. LIke way early. It's hot! Damn hot.
![](https://www.travelweekly.com.au/wp-content/themes/bandtv1/img/default.png)
Silversea taps Barbara Biffi as senior vice president for global sales
Ultra-luxury and expedition cruise travel brand, Silverseas, has announced Barbara Biffi as its new senior vice president of global sales. Biffi joined the company in 2007, holding numerous positions and gaining a deep understanding of the brand, the preferences of its guests and its strategic goals, the company said. An Italian national with a wealth […]
![](https://www.travelweekly.com.au/wp-content/themes/bandtv1/img/default.png)
Wendy Wu unveils new Japan travel brochure and itineraries
Get outta town! Off-beat Japan will be a lot less congested we figure than the usual tourist hotspots.
![](https://www.travelweekly.com.au/wp-content/themes/bandtv1/img/default.png)
UK and Europe event organisers look to venues with sustainability integrity, ICC Sydney survey finds
Here in Sydney, you can even eat the table centrepieces. Although we advise they be cooked first.
![](https://www.travelweekly.com.au/wp-content/themes/bandtv1/img/default.png)
Renos Rologas new general manager ANZ for FCM Travel
Two decades in the travel game! Let's hope Renos is in for the long haul at FCM.
![](https://www.travelweekly.com.au/wp-content/themes/bandtv1/img/default.png)
Untamed Escapes to offer Cultural Day Tour from Port Lincoln in partnership with Maba Idi
International visitors travel thousands of kilometres for this experience. Time to share.
![](https://www.travelweekly.com.au/wp-content/themes/bandtv1/img/default.png)
Luxe Finish Line Penthouses offer the best vantage point for the finish of the Sydney-Hobart
Long have we been following the yachts leavings Sydney Harbour and one day, we will see the finish, from this place!
![](https://www.travelweekly.com.au/wp-content/themes/bandtv1/img/default.png)
In a busy world, proximity to nature is the new luxury
Forget Raffles, treat your nearest and dearest to a stay at the local campsite. They'll be super close to nature.
![](https://www.travelweekly.com.au/wp-content/themes/bandtv1/img/default.png)
Circular Quay welcomes new Korean dining experience to Sydney Place
We once took Korean-American chef David Chang around Koreatown, Eastwood. Not happy about driving rain, loved the food.
![](https://www.travelweekly.com.au/wp-content/themes/bandtv1/img/default.png)
MSC Cruises unveils a new outdoor kid-friendly attraction on World America
Drop your kid down the jaws of a shark and they come out 11 decks below. Sounds good to me.
![](https://www.travelweekly.com.au/wp-content/themes/bandtv1/img/default.png)
Amadeus welcomes FCM Travel as new reseller partner of Cytric Easy
Cytric Easy, the travel management tool embedded in Microsoft Teams, is to be integrated into FCM Travel portfolio. Amadeus and FCM Travel have extended their Cytric distribution agreement to include Cytric Easy. With this new agreement, global travel management company FCM Travel, becomes a reseller of the innovative travel management collaboration solution embedded into Microsoft […]
![](https://www.travelweekly.com.au/wp-content/themes/bandtv1/img/default.png)
Australian travellers abandon peer-to-peer stays and gravitate back to big hotels, survey finds
Doom scrolling Airbnb for the best-possible stay options two days out from departure was wearing us down, apparently.
![](https://www.travelweekly.com.au/wp-content/themes/bandtv1/img/default.png)
Quark Expeditions launches the Ultimate Summer in the Arctic sweepstakes for travel advisors
Summer in the Arctic still means it's freezing. But hopefully a winning sweepstakes tickets will warm your cockles.
![](https://www.travelweekly.com.au/wp-content/themes/bandtv1/img/default.png)
‘I bet it smells weird’ – Internet divided over floating restaurant in China
I you are still feeling peckish at the end of your meal, their fish tank is full. But can you eat koi?
![](https://www.travelweekly.com.au/wp-content/themes/bandtv1/img/default.png)
‘Turn up in the Northern Territory this Spring’ campaign deals
Agents and airlines get all hot and sweaty over these enticing deals. Or did someone just turn the air-conditioning up?
![](https://www.travelweekly.com.au/wp-content/themes/bandtv1/img/default.png)
‘Like nothing on earth’: Saudi Arabia’s new Treyam resort set in a Star Wars-style landscape
As long as Jar Jar Binks is not there, we would like a seat at the Mos Eisley Cantina please.
![](https://www.travelweekly.com.au/wp-content/themes/bandtv1/img/default.png)
Raffles Hotels and Resorts is set to open in Tokyo in 2028
Time to get your vision boards at the ready! Raffles is landing in Tokyo!
![](https://www.travelweekly.com.au/wp-content/themes/bandtv1/img/default.png)
‘A true honour’ – Andrew Stark wins Flight Centre Director’s Award for the second time
Congratulations Andrew! If you're a fan of British reality TV you might notice a familiar face.
![](https://www.travelweekly.com.au/wp-content/themes/bandtv1/img/default.png)
Club Med debuts travel agent portal 2.0 with bonus prize for tops sales
See those people by the pool. That could be you. Start selling through the portal people!
![](https://www.travelweekly.com.au/wp-content/themes/bandtv1/img/default.png)
Envoyage announces 2024 Australian Icons and rewards event in the Maldives
We were going to edit our name into the list but we chickened out.
![](https://www.travelweekly.com.au/wp-content/themes/bandtv1/img/default.png)
HIF Global signs collaboration agreement with Airbus on eFuels
We know it's a good thing but can a jet fuel geek out there send in a diagram explaining this please.
![](https://www.travelweekly.com.au/wp-content/themes/bandtv1/img/default.png)
Crystal announces release dates for 2026 itineraries
If you have started collecting 2026 itineraries then here is another one for you.
![](https://www.travelweekly.com.au/wp-content/themes/bandtv1/img/default.png)
Cairns Airport unveils display of support for FNQ youth
If you were craving some winter sun now you have a cultural reason for booking a flight to Cairns.
![](https://www.travelweekly.com.au/wp-content/themes/bandtv1/img/default.png)
Viking announces six new cruise itineraries
Now's the time to start learning Putonghua, Nihongo and Lhasa. Or maybe even know where these are spoken.
![](https://www.travelweekly.com.au/wp-content/themes/bandtv1/img/default.png)
Join Qatar Airways, Celebrity Cruises & Klook – Showcase Your Brand at Click Frenzy Travel August 2024!
Clicking calmly will also be welcome when it comes to this particular deal. Click calmly here to find out more.
![](https://www.travelweekly.com.au/wp-content/themes/bandtv1/img/default.png)
InsideAsia Tours launches new incentive that doubles agent commission
Double commission! We like the sound of that. Hope their system doesn't crash as a result.
![](https://www.travelweekly.com.au/wp-content/themes/bandtv1/img/default.png)
Push to revive Parramatta’s iconic Roxy Theatre into entertainment destination
Long have we wished for this iconic heritage cinema to be revived as a tourist destination. Still waiting.
![](https://www.travelweekly.com.au/wp-content/themes/bandtv1/img/default.png)
Qatar Airways signs an expansion to Boeing 777-9 aircraft order
Known as a quiet rural town in England, the entire global aviation industry now has its eyes on Farnborough.
![](https://www.travelweekly.com.au/wp-content/themes/bandtv1/img/default.png)
Flight Centre shares down following revised profit guidance
The stock market moves fast. What will the rest of the week hold for Flight Centre?