Qantas vows to protect market share

Qantas has again vowed to maintain its domestic market share after injecting more capacity into core east coast routes and stepping up services to Perth.

Chief executive Alan Joyce said its well documented 65% market share was “profit maximising”.

“Our goal in the domestic market remains simple and consistent. We intend to retain the market share that enables us to maximise profit,” Joyce said.

But the rationale behind the additional capacity was questioned by Virgin Australia chief executive John Borghetti. Quoted in today’s Australian Financial Review, the one-time Qantas senior executive said: “I don’t know of any business that says 'I’ve got to have that market share' to the point and justify it for decades or a decade.”

Virgin was more concerned about yield and profit rather than share, he said.

The full extent of the capacity increases were not revealed by Qantas but additional services during peak times on core east coast routes between Sydney, Melbourne and Brisbane will form part of the expansion.

The carrier said it will also reintroduce Boeing 747 services between Sydney and Perth and add A330 flights from Melbourne to Western Australia.

It will provide passengers with an “international flying experience”, Joyce said, and give more consumers access to its Skybed business class product.

Jetstar will also increase services on key leisure routes while QantasLink will grow capacity across Queensland with the introduction of F100 jet service between Brisbane and Emerald.

Further details about routes and timing will be announced in “due course”, Joyce said.

Meanwhile, Qantas will further slash spending and re-shuffle its fleet plan as part of a strategic bid to remain “competitive in all business areas”.

Capital expenditure will be cut by a further $400 million next financial year in addition to the $500 million announced in February.

It will see expenditure in 2012/13 reduced to $1.9 billion.

Joyce said the savings will comes from delaying the arrival of two Airbus A380s from 2013 to 2016/17. The airline’s final six A380s will be delivered from 2018/19.

He added that progress is continuing on its “international transformation initiatives” with benefits of $280m to $365 million likely to be realised between now and 2014 with new alliances, route changes and improved fleet economics behind the strategy.

Joyce touched on the challenge of rising fuel prices, noting that the group’s “balanced portfolio” made it “well-placed” to manage ongoing high fuel prices and the challenging global economy.

“We are acting decisively now to position ourselves for a strong, sustainable growth over the long term,” he said.