Virgin Blue back to being stuck between Qantas, but for how long?

Virgin Blue A330 comparison.jpgWith Virgin Blue announcing more details of its domestic A330 service offering, it is evident the carrier is back to where it is trying to depart from: stuck in the middle between Qantas.

Before John Borghetti joined as the carrier’s chief executive, the middle market position Virgin embraced and others derided was Virgin offering more than Qantas low-cost subsidiary Jetstar but less than full-service Qantas.

Now Borghetti’s Virgin, and its ex-Emirates A330s in particular, finds itself stuck between Qantas. But not intentionally.

Virgin expected its A330 to be better than Qantas’ offering on the domestic transcon. And indeed it is better than the aircraft Qantas had mainly been using: the 767 and domestic A330-200 (see above charts).

But Qantas changed the market by deploying international aircraft with better seats that Virgin’s ex-Emirates A330s do not–presently–rival, a point Qantas chief executive Alan Joyce made clear in February: “Our competitors can simply not match the service that Qantas offers, particularly the Skybeds.”

Thus Virgin returns to the middle: ahead of some Qantas aircraft (767, A330-200 domestic) but behind others (international A330-200, A330-300, 747). (Note that Qantas has the wow factor of deploying its 747 on the route, but the flight is based on aircraft utilization, hence the awkward 10:10 am Sydney departure and 1:05 pm Perth arrival that does not permit a half workday in either city. The 747 is a gimmick to attract attention to Qantas’ presence on the transcon market.)

What is worth contemplating is how long this order will remain the status quo.

Virgin’s next two A330s–fresh from Airbus–reportedly won’t feature a middle seat, but it is likely those aircraft will be used internationally. As for the current pair of A330s, those are understood to be earmarked for an eventual cabin upgrade.

Depending how recovery continues and where fuel prices go, Qantas may need to recall its international fleet, giving Virgin top dog status unless Qantas makes adjustments to its transcon cabin.



On the price front, Qantas has not budged from its $1445 one-way Sydney-Perth business fares but has dropped one-way economy fares to $179 and Jetstar fares to $119.

This latest development to the transcon showdown may end up saying more about Qantas than Virgin. It was only a few months ago Qantas tried to introduce on a domestic A330-200 a new business class that was more of a big economy seat than proper business seat. After passenger criticism, Qantas relented and ditched the seat. This, critics say, is representative of Qantas’ praxis. Will the venerable carrier finally start being proactive instead of reactive?

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