Australia’s busiest air routes are set to get even busier after Qantas Airways announced plans to add more flights in the latest salvo in its battle with Virgin.
Those extra flights will not include any new A380s however, after Qantas announced plans to defer the delivery of two superjumbos to help slash spending by $400 million.
Qantas said the increased capacity to come in the 2012/13 financial year would help maintain what it believed was a 65 per cent share of the domestic market.
Qantas said it would: boost frequencies during peak times on the so-called “golden triangle” between Melbourne, Sydney and Brisbane; bring back the Boeing 747 on the Perth-Sydney route; and use more wide-bodied aircraft on Melbourne-Perth flights.
The airline’s budget offshoot Jetstar would also add more seats on flights to its key leisure markets, while regional operator QantasLink increases flights in Queensland.
The moves announced on Friday come as rival Virgin prepares to bring three wide-bodied Airbus A330s into its fleet by the end of calendar 2012.
Virgin is also adding more turboprop regional aircraft while trying to attract more business travellers and improve yields – or average fares per passenger.
Morningstar Equities analyst Nachiket Moghe said the extra Qantas flights highlighted the inroads Virgin was making into Qantas’s dominant position in the business market.
“It shows that Virgin is proving to be a threat, definitely,” he said.
In contrast to the domestic capacity growth, Qantas has again pushed back delivery dates for aircraft used in its international operations.
Qantas said it would not take delivery of two Airbus A380s due in 2013.
Instead, the double-decker superjumbos will arrive during the 2016/17 financial year, helping to reduce 2012/13 capital expenditure by $400 million to $1.9 billion.
Qantas also left open the possibility of further capex reductions, saying that capital expenditure in 2013/14 would be $1.9 billion or less.
“Our financial year 2014 capex will be at most $1.9 billion, with substantial flexibility retained, as we move beyond the peak of our fleet renewal program,” chief executive Alan Joyce told the Macquarie Australia conference.
Mr Moghe said continued weakness in global economic conditions could lead to Qantas delaying the arrival of the Boeing 787 Dreamliner into the fleet.
“If the demand situation remains subdued, then they will look at deferring the 787s in the future,” he said.
In February, Qantas deferred for six months delivery of the first of the 50 Dreamliners it has on order, as part of a $700 million capital expenditure reduction.
The planes were now due to arrive in mid-2013.
Qantas said consultation with union groups over the future of its three heavy maintenance facilities had concluded, with a decision expected in mid-May.
Qantas shares were 2.5 cents at $1.60 at 1535 AEST.
