What are people at QF/VA doing ? Are they asleep ?
retail 101 - match the opposition in price.
They are not selling a loaf of bread. There is a bit more to airline yield management then simply having the lowest price.
Which airline in Australia has been the most profitable domestically for the last few years? Are they the cheapest??
Business travellers are going to be somewhat wary of the fact that they need to wait 3 hours between flights. Meeting goes long, wait 3 hours for the next flight (if you get on). Afternoon meetings are cancelled, still need to wait 3 hours for your original service. Do they have 10 million credit card points that get them into the Rex lounge while that wait, oh probably not as they have a Velocity or Qantas FF account instead.
Not saying they won’t grab some market share and do it profitably but I hardly think the incumbents need to react too radically.