Virgin In Dig At Qantas

[Nigelinoz]

From http://www.travelweekly.com.au/dirplus/images/travelweekly/TravelTodayPDF/10_02_2009.pdf

The growing competition on trans-Pacific flights intensified yesterday as V Australia accused
Qantas of holding Australian travellers to "ransom" by overcharging on the route for years.
Speaking at the arrival of V Australia’s first 777-300ER in Sydney, Virgin Blue chief
executive Brett Godfrey said its aggressive pricing on the route fares lead in at $1199 - were
designed to pile the pressure on competitors.
"They’re lead-in fares but I’ll tell you what, they’ll be 25 per cent under what they were this time
last year," Godfrey said. "This route used to charge about 30 per cent more than a trip from
route used to charge about 30 per cent more than a trip from Sydney to London, yet Sydney
to London is 30 per cent further. You do the maths and you go, ‘something’s wrong’
‘something’s wrong’
"There’s 37 airlines competing on that market (London) and Qantas still say they did well in it.
This (the Pacific) is a market that they’ve basically held Australians to ransom for too long,he said.
He also defended the fact that V Australia loads on the Sydney-LA route which it launches
on February 27, were only 45 per cent. "That’s up until July, but that’s pretty good.
I’d rather have less load factor but a lot more yield..any idiot can sell 100 per cent of their seat.
V Australia will launch Brisbane-LA flights on April 8 and from Melbourne in September.
Services between Sydney and Johannesburg "we would expect in 6-12 months ,Godfrey added.
.

 

[JohnK]

The growing competition on trans-Pacific flights intensified yesterday as V Australia accused Qantas of holding Australian travellers to "ransom" by overcharging on the route for years.

For as long as I can remember the SYD/MEL/BNE-LAX route has been one of the most expensive routes per km in the world and Qantas wasn't the only airline operating these routes.

He also defended the fact that V Australia loads on the Sydney-LA route which it launches on February 27, were only 45 per cent. "That’s up until July, but that’s pretty good. I’d rather have less load factor but a lot more yield..any idiot can sell 100 per cent of their seat.

Is it just me or is this statement confusing?

 

[NYCguy]

Is it just me or is this statement confusing?

It's not just you...

Anyhoo, QF has been milking it's AU/US routes for all they are worth for years. UA is also guilty of gouging. The passengers who are losing most are those who pay for seats up the front. A published fare of more than AU$20K for a SYD/LAX return in F, or AU$15K in J (the same as the published F fare to LHR and back!), is nothing short of diabolical. QF readily admit that a considerable amount of their operating profit comes from those routes, and it's the big, bloated fares they charge us to sit in those big, comfy chairs that have airline management salivating with glee.

That's a duopoly for you... A very profitable arrangement for both participants. Why compete when people are stumping up the fares, rather than going the long-way-round via an Asian hub? And then there's air-freight - it has been said before that United run a very profitable trans-Pac airfreight service, which also happens to carry passengers. Will more heavies flying across the big ditch result in me paying less to send my wine purchases back to NYC at the end of an AU trip? I bet a case of RSW that the answer is "not bloody likely".

VA may stand to make a hole in the current arrangement, and with DL/SkyTeam joining the fray we MAY see pointy-end fares drop a little further. I'm a cynic though, and I feel confident that as soon as the world economy cycles up again, the fares will all start on an upward creep - it's too juicy a plum not to squeeze it for all it's worth.

 

[anat0l]

Overcharging it may be. So now the onus is on VA to prove it so.

I believe bringing in VA and DL on the Trans-pac may affect Y and possibly J prices (and possibly Y+ prices). Whether it will dent on QF's F market on this route is another consideration.

I'm not surprised by this kind of statement - Virgin have been playing sniper on QF for a long time now, capitalising (for morally good or bad) on QF bungles, aircraft incidents, monopolies and miscellaneous gaffes or related that have seen QF's reputation degrade steadily over the last few years. That's not to say it's not morally wrong of them to do so (after all, in the advertising industry, anything goes, doesn't it?), but so there.

And yes NYCguy I'm expecting that when things start to pick up in the world economy, air fares will steadily increase again. We might even see the dreaded fuel fines come back.