Virgin scores wins over Qantas for reliability and biggest domestic market share
After playing second fiddle for so long, Virgin Australia has claimed two key victories over Qantas this week. So is the smaller airline now the bigger success story? HAVE YOUR SAY
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After years of playing second fiddle to the larger, older Qantas, Virgin Australia has stepped confidently into the limelight as not only the biggest carrier of domestic passengers in Australia but the most reliable as well.
Two sets of data released last week highlighted just how far Virgin has come as an airline, since sinking into administration at the start of the pandemic, and emerging as a “value carrier” under new owners Bain Capital.
First there was the Australian Competition and Consumer Commission report on airlines, showing Virgin had pulled ahead of Qantas in terms of domestic market share, since the demise of rival Rex’s jet operations.
In December Virgin carried 35 per cent of all domestic travellers, to Qantas’ 34.6 per cent, while Jetstar benefited from the summer holiday season with 29 per cent.
Although it was noted the figures reflected the relative increase in leisure travel demand and decrease in corporate travel at year’s end, it was the first time Virgin has overtaken its larger rival.
In a further boost for Virgin, on-time performance data for January released by the Bureau of Infrastructure, Transport and Regional Economics recognised the airline group as the most reliable.
As well as landing 76.9 per cent of services on time, to Qantas’ 75.6 per cent, Virgin cancelled a mere 0.9 per cent of flights, or 105 in total, to Qantas 2.4 per cent cancellation rate (419 services).
Virgin Australia chief operations officer Stuart Aggs said reliability was “incredibly important to guests, and never more so than in the holiday period when people were travelling to see family and friends”.
“In addition to improving our on-time performance, we have recorded consistently strong completion rates with more than 99 per cent of Virgin Australia’s scheduled domestic flights operating in December and January,” Mr Aggs said.
“This is despite some weather-related challenges caused by summer storms.”
It’s quite a turnaround from the same time last year, when Virgin had just announced that “now was the time” for CEO Jayne Hrdlicka to transition from the role of CEO.
The shock announcement followed a lacklustre summer performance by the airline, the departure of key staff, a delayed initial public offering and a perceived failure to capitalise on Qantas’ reputational and brand woes.
Twelve months on it would appear Virgin has undergone something of a rebirth, buoyed by its partnership with Qatar Airways which was also given tentative approval from the ACCC this week.
Griffith University head of aviation Gui Lohmann said the shift in market power and balance between the two rival airlines was critical, and should be welcomed by customers.
“We’ve got to remember Virgin Australia retrenched a lot of staff during the pandemic, they let their long-haul planes go, and now they have a partner in Qatar, who can allow them to grow as they should and as the market deserves,” said Professor Lohmann.
“It also puts the initial public offering (IPO) of Virgin on a much stronger pathway, when there is a robust, well-managed, well-financed airline behind it, in so many ways that gives confidence to any next buyers.”
Not that Qantas has thrown in the towel. Rather the flying kangaroo appears to be taking a lower profile while it focuses on restoring its own reputation, with some success.
Global public opinion and data company YouGov revealed this week that Qantas had topped the “biggest brand movers list” with gains in six metrics including general impression, corporate reputation, customer satisfaction, recommendation, quality and consideration.
The company attributed Qantas’ rise up the ranks to its recent frequent flyer program overhaul, with the changes due to kick in mid-year.
Qantas is also in the process of renewing its fleet, adding new A220s to more routes including Brisbane-Melbourne, Melbourne-Canberra, Sydney-Launceston and Sydney-Hobart.
With slightly wider seats than 737s, and more leg room in the first six rows of economy, the 137-seat aircraft are proving a hit with passengers.
New A321XLRs should also make an appearance on domestic routes by mid-year, with the first of 28 on order by Qantas due to arrive in Australia in April.
Professor Lohmann said Qantas still had some work to do with its half-year results due next week, looming as an important test.
“The new leadership has to address the operational stuff, the delays; they have to address the perception of closeness with the government, they have to repair their brand,” he said.
“Australians have a very deep connection with Qantas, it’s been part of millions of peoples of lives for decades and in recent years Qantas has let people down.
“It’s a new era for Qantas to try to correct that, and it looks like they’re on the right track to do it.”
Originally published as Virgin scores wins over Qantas for reliability and biggest domestic market share
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