Updated Air Services agreement between Australia and Indonesia

[Harrison_133]

One interesting point in the Virgin submission: Avalon is no longer considered a major port under the Indonesia bilateral, so Jetstar can now enjoy unrestricted capacity on AVV-DPS while deploying that capacity elsewhere.

 

[muppet]

Responses to IASC addressing the additional criteria for the extra Indonesia capacity have been uploaded.

Qantas Group submission:

https://www.iasc.gov.au/sites/default/files/documents/20261105-public-version-iasc-indonesia-supplementary.pdf

Virgin Australia submission:
https://www.iasc.gov.au/sites/defau...ation-for-capacity-on-the-indonesia-route.pdf

Interested parties now have until 20 November to comment on the airlines' submissions.

I see VA’s point that QF Group keeps getting the lions share of these allocations, but VA is just not offering anything worthwhile. Just more Bali from PER, MEL, BNE and SYD - whereas QF is offering new routes and more frequencies to CGK.

 

[Saab34]

I see VA’s point that QF Group keeps getting the lions share of these allocations, but VA is just not offering anything worthwhile. Just more Bali from PER, MEL, BNE and SYD - whereas QF is offering new routes and more frequencies to CGK.

But QF can dump those new routes and shift all capacity back to Bali whenever they please

I think total market share is important here.

 

[Harrison_133]

I see VA’s point that QF Group keeps getting the lions share of these allocations, but VA is just not offering anything worthwhile. Just more Bali from PER, MEL, BNE and SYD - whereas QF is offering new routes and more frequencies to CGK.

To be fair, the Qantas Group is only adding one "new" route (WSI-DPS). Even then, that is just adding extra capacity into the Sydney area.

PER-CGK might be new to the Qantas network in the same way PER-DPS is new to the Virgin network, but it is not an unserved market. Batik is already there.

While I do see merit in diversifying Jakarta options, and more Bali flying is undoubtedly boring, the vast majority of demand is still to Bali, so it's no surprise the airlines will go chasing that market.

But QF can dump those new routes and shift all capacity back to Bali whenever they please

I think total market share is important here.

The QF Group also have more wriggle room to shift their capacity around than VA does.

Avalon being removed as a major city gives the QF Group an extra 1160 seats per week that they can now use elsewhere.

The Enhanced Regional Package provisions have also been removed, so the Qantas Group now has a grandfathered allocation of 2320 seats per week that they can operate without restriction, so they no longer need to operate that capacity via or beyond to a point in Australia outside of the major gateways. Ironically, these are provisions that meant Virgin lost out on the allocation.

 

[Saab34]

The Enhanced Regional Package provisions have also been removed, so the Qantas Group now has a grandfathered allocation of 2320 seats per week that they can operate without restriction, so they no longer need to operate that capacity via or beyond to a point in Australia outside of the major gateways. Ironically, these are provisions that meant Virgin lost out on the allocation.

I don’t see why VA shouldn’t be given the full capacity here now.

So I assume Jetstar will cancel that Cairns to Melbourne/DPS Tag flight now, they can run that domestic leg without all the extra overheads that comes with a Int to Int D Leg.

But it’s starting to get to the point, how much more capacity can the capitals take before DPS suffers overcapacity. Seems like it’s starting to get a bit unsustainable .

 

[L2.]

Not inconceivable that if some of QF’s SIN based cabin crew are dedicated to the A330 that they have a rotation that includes SYD-DPS OR MEL/SYD-CGK and back.

The reported figure was a target for 650 SIN based crew members within 5 years. Surely far more than are needed just for SIN-SYD/MEL/BNE/PER routes.

Which makes me wonder that if in say a decade from now, the game plan is for QF's international crewing arrangements across the network to look a lot like how Jetstar's currently do.

 

[Saab34]

The reported figure was a target for 650 SIN based crew members within 5 years. Surely far more than are needed just for SIN-SYD/MEL/BNE/PER routes.

Which makes me wonder that if in say a decade from now, the game plan is for QF's international crewing arrangements across the network to look a lot like how Jetstar's currently do.

Without a doubt they will slowly ease it in over time. They are in the business of continuing to look for productivity improvements, this would certainly be on the whiteboard.

XLR International will surely be crewed by Asian contractors eventually. Especially with wages running at 5% growth at the moment.

 

[Harrison_133]

But it’s starting to get to the point, how much more capacity can the capitals take before DPS suffers overcapacity. Seems like it’s starting to get a bit unsustainable.

Unsustainable for who though?

Jetstar averages over 90% load factors to Indonesia. Qantas and Virgin are in the high 80s. In peak periods, all the Australian carriers are nearly maxed out in seat utilisation. Meanwhile, the Indonesian carriers trail with averages in the 60s and 70s.

Indonesia remains the number 1 destination for Australians travelling overseas, with leisure traffic driving a significant portion of this. The market is also growing year-on-year. From ABS data for the 2025-2026 financial year, 1.77 million Australians returned from Indonesia, up from 1.74 million in 2024-2025 and 1.31 million in 2018-2019.

Even with recent capacity cuts, airlines are saying leisure traffic remains resilient. While the current cost of living might see people tightening the purse strings, Bali being seen as a "budget" option will probably keep demand somewhat stable.