Originally Posted by
Traffic_Is_Er_Was
The airport charges apply per pax, independent of the airline. A $300 QF airfare has $25 in airports fees attached and a $125 JQ airfare would have the same $25 attached. How many pax will buy the $125 JQ rather than the $300 QF? That's what Joyce is protecting by not putting JQ into CBR.
Additionally, the front end of those QF aircraft are most likely all filled very lucratively and exclusively by the taxpayer. The $300 seats down the back are just the gravy. Why give those away?
Albeit an extreme example, but demand elasticity (price sensitive customers) is the Achilles heel of the low fare airline model: It requires continued low price (thus high load factor) and is very difficult to fill if the price rises. That price rise can be either an attempt to raise yield (profit margin) or taxes.
Little Napoleon unwillingly is showing all the weakness of the model: It can't just fly where Qantas does, despite the wet dreams of IR as it can't generate yield.