Wirraway
27th Aug 2004, 18:13
Sat "Sydney Morning Herald"
Qantas rivals cry foul over government travel
By Alexandra Smith
August 28, 2004
The regional airline Rex will honour Virgin Blue tickets between Sydney and Canberra but admits it may dump the route because Qantas dominated the travel market for public servants.
Virgin Blue has announced it will stop services between Sydney and Canberra next Saturday, blaming government agencies for booking flights solely with Qantas.
Rex's chief executive, Geoff Breust, said all Virgin passengers booked to fly after September 5 would be transferred to Rex without extra cost, but he admitted the route was losing the airline "significant money".
He said it had the potential to be one of the airline's most profitable routes but claimed the Government was not adhering to its "best fare of the day" policy.
The Government has a deal with Rex and Virgin Blue to give them each at least 10 per cent of its custom but Mr Breust estimated Rex received, at best, 5 per cent.
He also questioned the Government's travel figures. These show that of the 860,000 passengers who fly between Sydney and Canberra each year, only 150,000 are in government.
"We think that the pool is a lot higher than that, probably closer to 350,000," Mr Breust said.
Rex is midway through an independent survey at Canberra Airport to gauge the accuracy of the Government's travel figures and the airline is expected to make a decision on the route early next month. In the meantime, Mr Breust said
the airline was "dedicated to providing a competitive alternative to public service travellers".
Virgin Blue's head of strategy, David Huttner, said Virgin might reconsider its decision to scrap the service soon.
"Our major competitor continues to have a stronghold on the $300 million spent each year on air travel by Commonwealth officers," Mr Huttner said.
"Whilst we have recently seen a small increase in Virgin Blue's share of the Commonwealth Government market ... Qantas continues to have around 95 per cent of that market, a most unhealthy situation and contrary to sound competition policy."
He said Virgin Blue had secured 25 per cent of all private sector travel but only 2 per cent of government travel. "Someone has their purchasing policy wrong," he said.
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Qantas rivals cry foul over government travel
By Alexandra Smith
August 28, 2004
The regional airline Rex will honour Virgin Blue tickets between Sydney and Canberra but admits it may dump the route because Qantas dominated the travel market for public servants.
Virgin Blue has announced it will stop services between Sydney and Canberra next Saturday, blaming government agencies for booking flights solely with Qantas.
Rex's chief executive, Geoff Breust, said all Virgin passengers booked to fly after September 5 would be transferred to Rex without extra cost, but he admitted the route was losing the airline "significant money".
He said it had the potential to be one of the airline's most profitable routes but claimed the Government was not adhering to its "best fare of the day" policy.
The Government has a deal with Rex and Virgin Blue to give them each at least 10 per cent of its custom but Mr Breust estimated Rex received, at best, 5 per cent.
He also questioned the Government's travel figures. These show that of the 860,000 passengers who fly between Sydney and Canberra each year, only 150,000 are in government.
"We think that the pool is a lot higher than that, probably closer to 350,000," Mr Breust said.
Rex is midway through an independent survey at Canberra Airport to gauge the accuracy of the Government's travel figures and the airline is expected to make a decision on the route early next month. In the meantime, Mr Breust said
the airline was "dedicated to providing a competitive alternative to public service travellers".
Virgin Blue's head of strategy, David Huttner, said Virgin might reconsider its decision to scrap the service soon.
"Our major competitor continues to have a stronghold on the $300 million spent each year on air travel by Commonwealth officers," Mr Huttner said.
"Whilst we have recently seen a small increase in Virgin Blue's share of the Commonwealth Government market ... Qantas continues to have around 95 per cent of that market, a most unhealthy situation and contrary to sound competition policy."
He said Virgin Blue had secured 25 per cent of all private sector travel but only 2 per cent of government travel. "Someone has their purchasing policy wrong," he said.
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