More cheaper fares on the horizon

More cut-price fares and 40 per cent more discount seats available. That's the likely outcome as Australia's domestic airfare war intensifies.

However, the escalation of competition may force one or more of the players to the wall. Will there still be four airlines battling it out in 2002?

Virgin Blue and Impulse plan to lodge official complaints against their largest rival, Qantas, if it tries to exploit its market dominance and dump capacity on major routes between Sydney, Brisbane and Melbourne.
Qantas says jets used on uneconomic international routes will be redeployed to domestic routes but has rejected the “dumping” claims. The Australian Competition and Consumer Commission says it is watching the industry closely.

Ansett has similar plans to expand services after the drag it has placed on its parent Air New Zealand was revealed last week. It reported a 97 per cent decline in half year profits and chief Gary Toohmey said Ansett must continue to expand its customer offering in light of greater competition. “We will be adding capacity to the domestic market including frequency and wider body aircraft,” he said.

Sydney Morning Herald, 24/02/01, p9
ABC News Online 25/02/01

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