ACCC backs Virgin over Qantas in battle for extra Bali seats

The competition watchdog has weighed into the battle between Qantas and Virgin Australia for extra airline seats to Bali.

The competition watchdog has weighed into the fight over additional airline capacity on routes to Bali, saying Virgin Australia should get the seats ahead of Qantas.

An allocation of 2464 seats is up for grabs from airports other than the four major gateways of Sydney, Melbourne, Brisbane and Perth.

Given the popularity of Bali among Australian holiday-makers, any extra capacity is typically hotly contested, with airlines confident of filling additional seats.

Qantas has asked for 2320 seats for its low fares partner Jetstar, on a new route from Cairns to Denpasar via Melbourne, and another from Adelaide to Denpasar via Perth.

On the other hand, Virgin Australia wants all 2464 seats, to operate flights from the Gold Coast to Denpasar via Perth, and Adelaide-Perth-Denpasar.

Qantas has told the International Air Services Commission Jetstar deserves the seats because it offers the most competitive fares, and is the biggest carrier of Aussies to Bali.

Virgin Australia’s case argued that the airline needs more capacity to better compete with Jetstar and Qantas, and also stated that it employs an all-Australian crew.

A number of submissions have been lodged with the IASC in support of Virgin Australia, including from Gold Coast Airport, the Transport Workers Union and the Flight Attendants Association of Australia.

The Australian Competition & Consumer Commission also made a submission saying the Virgin Australia proposal “would appear to be more conducive to fostering a competitive environment and a broader distribution of capacity than the proposal from Qantas”.

“An additional allocation of capacity to Jetstar would increase the level of concentration of capacity among the Australian providers of services on the route,” said the ACCC’s general manager of infrastructure and transport Katie Young.

“As set out in the Qantas submission, Jetstar operated the largest number of seats between Australia and Indonesia during the year ending September 2023, with 43.4 per cent. The Qantas Group combined operated 54.8 per cent of seats on the route. In contrast, Virgin Australia operated 14.7 per cent of seats during this time.”

Post-Covid-19, Bali has maintained its popularity with Australians, continuing as our favourite overseas holiday destination. Picture: iStock

As well as providing more competition on routes to Bali, the ACCC noted that Virgin Australia’s proposed Gold Coast-Perth flights would compete with Jetstar.

“In its June 2023 report on domestic air services, the ACCC reported that the Gold Coast-Perth route was by far the least recovered from the Covid-19 pandemic, with a little over 50 per cent of passengers in April 2023, compared to April 2019.”

The ACCC’s support for Virgin Australia comes as the watchdog takes legal action against Qantas for allegedly selling seats on already cancelled flights.

The TWU and FAAA both backed Virgin Australia’s proposal over Qantas, on the basis it would mean more jobs for locally based crews.

“Prioritising directly-hired, local aviation jobs is essential to the long-term stability of the aviation sector in Australia, and maintaining a high level of safety and service standards,” said TWU national secretary Michael Kaine.

“Virgin’s commitment stands in contrast with Jetstar and Qantas’ heavy reliance on internationally-based crews.”

The IASC was expected to make a final decision in coming weeks. Jetstar, Qantas and Virgin Australia are among eight airlines operating flights between Australia and Indonesia.

Bureau of Statistics data for November showed Indonesia was the most popular country for short term visits by Australians.