Qantas boss hits back at Virgin Australia
Qantas chief Alan Joyce has blamed the domestic sky wars with Virgin Australia for its deteriorating financial performance.
He said that since early 2012 there had been an “unprecedented distortion” of the Australian domestic market, “with Virgin Australia’s strategy to seek majority ownership and massive financial backing from foreign government-owned airlines”.
“This foreign government capital has been used to finance dramatic increases in domestic capacity, with profound implications for the future of Australia’s aviation industry,” Joyce said.
In the latest move Virgin is seeking to raise $350 million from investors, with much of it coming from its largestt airline stakeholders, Etihad, Air New Zealand and Singapore Airlines.
Joyce said the Virgin strategy “is designed to weaken Qantas in the domestic market”.
“The uneven playing field in Australian aviation is being tilted further. We cannot and we will not stand still in these extraordinary circumstances,” Joyce added.
Qantas Group domestic capacity (comprising Qantas Domestic, QantasLink and Jetstar Domestic) is expected to increase by 1.9% in 1H FY14 compared to 1H FY13;
Total domestic market capacity is expected to increase by approximately 2.7%, driven by estimated competitor capacity growth of 3.9%.
Group yield (excluding the impact of foreign exchange movements) is expected to be approximately 3.5% lower in 1H FY14 compared to 1H FY13, largely due to increased capacity in the domestic and international markets.
Group loads are expected to be 1.6 percentage points lower in 1H FY14 compared to 1H FY13.
Bev
Editor in chief Bev Fearis has been a travel journalist for 25 years. She started her career at Travel Weekly, where she became deputy news editor, before joining Business Traveller as deputy editor and launching the magazine’s website. She has also written travel features, news and expert comment for the Guardian, Observer, Times, Telegraph, Boundless and other consumer titles and was named one of the top 50 UK travel journalists by the Press Gazette.
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