Lyell Strambi, chief executive officer of Qantas Domestic, addressed the media in a briefing at Sydney Airport on Sunday and he said that there is a lot of capacity in the domestic market, making it good for the passengers. However, this high capacity is not doing anything good for the airlines. Flight capacity for the December half of the year is 12% higher than the same time last year, leaving airlines trying to match the supply of the available seats to the demand.
Russell Shaw, an analyst at Macquarie Group Ltd., said that business class ticket prices have fallen 40% during the past year, bringing them to the lowest they have been in two decades and all because Virgin Australia has increased its level of competition against Qantas Airways. Qantas has announced that they will be switching to Airbus SAS A330s starting in May on flights between Perth and Sydney and Melbourne, something Virgin has already done.
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