Qantas Low Fares Amid Price War

Submitted by Jim Thesiger on 30 July, 2009 - 06:32

The Australia based domestic and international air transportation service provider Qantas Airways (QAN) have said that it will go on with the price war regarding airfares to remain competitive in the market. According to Alan Joyce, the chief executive of Qantas, the commercially driven carriers of Qantas routes were acting rationally while others moved on to adding up capacity amid a market downturn leading towards the price war.

The price war was blamed as the key reason that lead towards loss in some international routes like Australia to Los Angeles and Britain. In response to a question Mr. Joyce also added that Qantas might ground and defer aircrafts in order to reduce capacity. However, the airline is also pretty much determined to keep up with the ongoing price competition.

Mr. Joyce also mentioned that Qantas will continue operating across the pacific route. He said the joint venture between Virgin Blue and Delta Air Lines will not be opposed by Qantas but also stated that new entrants such as US carrier Northwest and Continental lead the route into losses in the past.

While expressing his personal opinion regarding the global economic crisis Mr. Joyce said it is too early to come up with any opinion right at the moment considering the fact that a huge amount of instability is still existing in the market. Talking about the fourth A380 aircraft, Mr. Joyce revealed that the airways delayed on taking the aircraft as the superjumbo was not completely ready for delivery in the original date. However, the aircraft has achieved considerable attention from customers he claimed.

The chief executive was speaking at the 50th anniversary of the launch of the historic first commercial passenger flight in the pacific route. This is the route where the new Boeing 707 of the airlines will make its debut. The Boeing 707 will save 50% of flight time and will provide maximum level of service for the passengers in routes like Pacific.