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Wednesday 22nd of May 2013
Qantas experiences increased competition
A strong Australian dollar is good news for travellers and for airlines. However, flag carrier Qantas, which has seen an upsurge in bookings on its budget brand Jetstar, is also facing an increase in competition. For the year to 30 June, Jetstar was responsible for 26 per cent of its parent’s total earnings.
Out of A$644 million, A$169 came from the low-cost carrier. Other budget airlines are aiming to tap in to the market, and as of this summer Scoot, owned by Singapore Airlines will be putting the pressure on the flying kangaroo by shuttling 400 people per day to holiday destinations in Asia.
Malaysian-based Air Asia X is also cashing in. The company recently announced that it would be slimming down its operations in Europe because of the high taxes being charged there and concentrating on growing across Asia and Australasia. In April it will start to carry passengers between Sydney and Kuala Lumpur with single tickets priced as cheaply as A$60.
Qantas is currently trying to establish a premium regional carrier in Asia in an effort to make international travel profitable once more. However, recent fights with the unions and the price of jet fuel have cost the airline around $650 million.
Virgin Australia is also impinging on Qantas business and has just launched premium class seats between Brisbane, Melbourne and Sydney. Tickets for the flights are around 30 per cent cheaper than the market rate.
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