Qantas Group’s big capacity boost to put pressure on Virgin Australia

The airline is supercharging its capacity in the new year with what has the appearance of an aggressive bid to increase domestic market share.

Qantas and its budget carrier Jetstar will add an additional 300,000 seats across more than 1300 extra flights in the first half of 2025 in a move that will put pressure on rival Virgin Australia.

The significant capacity increase appears aimed at increasing the domestic market share of the powerful Qantas Group at the expense of Virgin which is focussing on its return to international long-haul flying with partner Qatar Airways.

Following the demise of Rex and Bonza this year, Qantas and Jetstar have lifted their slice of the domestic pie by 2.1 per cent to 64.8 per cent in total.

Virgin Australia has also benefited to claim 33.6 per cent of the market – its biggest share since March 2023.

But with delays on the delivery of new Boeing 737 Max 8s, Virgin will struggle to keep up with the Qantas capacity expansion across some of the country’s busiest routes.

At the heart of Qantas’ plan, was a fleet reshuffle that would see larger aircraft operate routes currently flown by smaller planes.

Those earmarked for more seats and services include the lucrative so-called Golden Triangle routes of Melbourne-Sydney, Brisbane-Sydney and Brisbane-Melbourne, as well as Adelaide-Brisbane, Melbourne-Gold Coast and Brisbane-Townsville.

A Qantas statement said the additional seats were possible “by shifting some international flying to domestic and improving aircraft utilisation”.

This includes an A330 coming off services to South Korea, which will replace Boeing 737s on Sydney-Perth and some Golden Triangle routes.

Qantas has turned one of its 737s into a jet-powered version of Santa’s sleigh for the Christmas period.

Qantas A330-200s have 271 seats, including 28 in business, compared with 174 on 737s.

Sydney-Papua New Guinea services are slated for suspension in February, freeing up another 737 to operate more domestic flights.

“The group continues to have flexibility to respond to demand across its domestic and international networks, with 20 new aircraft arriving next year as part of the group’s fleet renewal program,” said Qantas.

Those new aircraft including the A321XLR with 197 seats, and A220s with 137 seats which are replacing retired Boeing 717s with 110 seats.

Jetstar is also beefing up its fleet with 220-seat A321neos, 18 of which have arrived, with another four to come.

And QantasLink is about to take delivery of its 32nd Q400 aircraft, the first of 14 more Dash 8s set to make the airline the biggest operator of that type in the world.

Unfortunately for travellers, it appears unlikely the extra capacity will mean lower airfares, with Qantas conceding group domestic fares have increased in line with inflation since this time last year.

Some routes, including those where capacity is being added, have had higher increases due to the exit of Rex, meaning demand is outstripping supply.

A Qantas spokesman pointed out that Jetstar had fares starting from $52, and almost a million seats had been discounted for the summer holiday period.

Another sale was flagged for Boxing Day, across domestic and international routes.

The Qantas capacity dump comes as new data from aviation analyst OAG shows Melbourne-Sydney is once again the world’s fifth-busiest domestic route, a position it’s held since 2019.

In 2024, 9.2 million passengers travelled between Melbourne and Sydney. Jeju-Seoul remained the world’s busiest domestic route, with 14.2 million passengers making the short 70-minute flight.

The second and third-busiest routes were both in Japan — Sapporo to Tokyo-Haneda, and Fukuoko-Tokyo-Haneda, and the fourth in Vietnam, Hanoi to Ho Chi Minh City.