How ‘Aggressive’ Qantas Now threat to Fiji Airways
“Thirdly, through our codeshare relationship, Qantas has earned healthy codeshare commissions for little cost and risk.
“Conversely, by operating its own services, at its cost and risk, we estimate that Qantas will struggle to turn a profit on the route.
Qantas’ sudden flip from ally to adversary
“This brings into question the entire commercial rationale.
“Surprisingly, Qantas has recently indicated it will be increasing from four flights per week to a daily service between Sydney and Nadi later this year. “Qantas’ sudden flip from ally to adversary has been very damaging for Fiji Airways.
“It is competing aggressively, actively directing passengers onto Qantas and Jetstar services.
“It is very difficult for a small Pacific island national carrier to compete with the substantial market power and financial capability of Qantas which, frankly, dwarfs the resources and capability of Fiji Airways. “Fiji Airways has met with Qantas on a number of occasions to voice our concerns. However, it seems that they have fallen on deaf ears. Qantas has cited increased connectivity for its own passengers as a key reason for flying to Fiji, but our analysis has shown that, with the exception of some marginally improved connection times, the Qantas services do not create any meaningful new connections.
“This whole situation raises questions about Qantas’ real motive.
“What I can tell you is this sudden, aggressive escalation in competition is severely damaging Fiji’s national carrier and our ability to compete.
“It should also be noted that Fiji Airways is a vital contributor to the Fijian economy, as well as the regional economies of neighboring South-West Pacific States whose economies, like Fiji, are highly dependent upon tourism and trade. “The economic impacts on Fiji Airways this year are already apparent, and forecast figures present a worrying trend.
“The public should be aware that this race to the bottom not only stands to damage the economic stability of one of their favourite holiday destinations, to the great detriment of the Fijian people.”
International airline activity report
The Australian government’s international airline activity report shows Fiji Airways has a dominant share of flights between Fiji and Australia.
The airline carried 43,393 passengers between Australia and Fiji in June, compared with 23,779 on Virgin Australia, 5017 on Jetstar and 4686 on Qantas. Since 2012, Qantas had removed its four directors from the Fiji Airways board because it disagreed with moves by the major shareholder, the Fijian Government.
Qantas claimed that the Government was interfering in the management of the airline.
But there had long been a view in Fiji that Qantas had seized too much control in the Fiji’s national carrier. It did not always act in Fiji’s best interests.
This included Qantas having veto powers at board level and people from Qantas in key senior management roles.
Bainimarama government
The Bainimarama government, with Mr Sayed-Khaiyum playing a key role, changed the balance of power.
Fiji Airways has grown and grown.
The question is: what game is Qantas playing?
Now the Qantas moves are out in the open. So are the Fijian concerns.
The coming weeks will be interesting.