Virgin Australia lobbies against extension of Qantas and Air Niugini Brisbane-Port Moresby codeshare

    Virgin Australia issued (02-Mar-2018) a submission to Australia‘s International Air Service Commission (IASC), in response to an application by Qantas to the IASC to continue and extend its codeshare relationship with Air Niugini to Papua New Guinea (PNG) on the Brisbane-Port Moresby route. According to Virgin Australia:

    • The codeshare cooperation between Qantas and Air Niugini has already had a detrimental impact on competition on the Brisbane-Port Moresby market since it entered into operation;
    • The commercial performance of Virgin Australia on the Brisbane-Port Moresby route has deteriorated significantly since the codeshare went into effect. As a result of this, the carrier has reduced its operations from six to five times weekly as of Feb-2018 which has “weakened competition on the route”;
    • Across all markets between Australia and PNG, the load factor achieved by all carriers in 2017 was 51.3%. Virgin Australia achieved a load factor of 35.0%, with Qantas at 57.6% and Air Niugini at 54.2%. Virgin’s average load factor was more than 16ppts below the average load factor for all carriers on all routes;
    • Even without the codeshare relationship, Qantas and Air Niugini would still “dominate” the Brisbane-Port Moresby route, with a combined passenger share of 80% and a capacity share of 72%. Allowing the codeshare relationship to continue would “enable them to cement their dominance in the market” which may create conditions that would make the route unviable for competitors;
    • The commercial performance of Virgin Australia’s services on the PNG route “deteriorated dramatically” in 2017, following the commencement of parallel code share services by Qantas and Air Niugini. Between 2016 and 2017 overall seat capacity on the Brisbane-Port Moresby market grew by 8% and passengers by 6%. For the same period, Virgin Australia’s seat capacity decreased by 3% and the number of passengers carried fell by 30%;
    • Virgin Australia’s average fares we offered in 2017 were “significantly cheaper than those offered by our competitors”. [more – original PR]