Qantas and Virgin battle over lucrative rights to Bali flights

Australia’s biggest airlines are currently battling over lucrative flights to Bali, with Qantas arguing it will be able to offer cheaper airfares if granted the rights.

Qantas has written to the airline competition regulator International Air Services Commission requesting for an allocation of 2320 seats per week in both directions between Australia and Indonesia for its budget carrier Jetstar.

Wholly-owned by Qantas, Jetstar is seeking to launch services that would fly from Cairns to Melbourne and then Denpasar as well as Adelaide to Perth then Denpasar from May this year.

The airline is also seeking permission to code share services on flights with Indonesian carrier Garuda, which would also increase its share of flights on the route.

In their submission, Qantas promised the regulator the extra flights would mean “significantly lower” prices for Australians travelling to Bali, arguing Jetstars fares are already 14 to 68 per cent cheaper than other carriers.

Qantas says Jetstar’s average fares were 37 per cent lower than Virgin’s between Melbourne and Denpasar and 31 per cent lower between Adelaide and Denpasar over a six-month period last year.

The airline sector is facing increased scrutiny from the regulator over competition and increasing flight costs, with the government launching a review last year.

Virgin has hit back at Qantas’ request, arguing that granting the flights to its rival would undermine competition on the popular route.

“Currently, Virgin Australia faces a competitive disadvantage in major capital cities such as Sydney, Melbourne, Brisbane, and Perth, and it currently holds less than 20 per cent of the total capacity between Australia and Indonesia,” the airline said.

“If the additional bilateral capacity were to be allocated to the Qantas Group, Virgin Australia’s share would further decrease to 18 per cent.”

Separate to Qantas, Virgin has applied for an allocation of 2464 seats per week, with flights to run each day from Adelaide to Perth then Denpasar and Gold Coast to Perth then Denpasar.

The airline has also requested permission to code share with Canadian Airlines, similar to Qantas’ request to share flights with Garuda.

“Even if Virgin Australia’s application is successful, its overall bilateral capacity share would only increase from less than 20 per cent to 27 per cent, which remains significantly lower than its largest competitor,” Virgin argued.

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