Qantas continues to lose business travellers to Virgin Australia

By Chris Chamberlin , July 10 2014
Qantas continues to lose business travellers to Virgin Australia

IN BRIEF | Qantas is slowing losing its share of the corporate market to Virgin Australia, according to a new survey of the nation's largest companies.

The third annual Morgan Stanley AlphaWise survey polled some 214 corporate travel managers at companies with more than $1 billion of revenue or 1,000 employees

While Qantas still holds a commanding 54% share of those company's business travel bookings against Virgin Australia's 27%, the challenger crept up 4% on the Flying Kangaroo for domestic bookings.

"Qantas’s reduced dominance with large accounts likely reflects Virgin’s graduation to full service carrier, in the sense that its now completed domestic offering is sufficient for the high demands of larger accounts" Morgan Stanley analyst Nicholas Markiewicz told The Financial Review.

Ironically, Markiewicz adds that the customers preferred Qantas over Virgin Australia in every category bar price – but price has become the primary driver for corporate travel managers, which in turn has seen Virgin gaining ground due to its lower fares.

Read more: Qantas loses business travellers to Virgin

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Chris Chamberlin

Chris Chamberlin is the Associate Editor of Executive Traveller, and lives by the motto that a journey of a thousand miles begins not just with a single step, but also a strong latte, a theatre ticket, and later in the day, a good gin and tonic.

23 Sep 2013

Total posts 4

Qantas continues to cut routes and they replace them with Jetstar flights (if they're even replaced at all). No thanks.

17 Feb 2012

Total posts 121

That isn't true - Qantas are in fact flying back to places they had perviously stopped flying to.  The Gold Coast, Hamilton Island and Whitsundays - are three recent examples.  They are also amping up flying to Hawaii.  They have downed capacity in markets like Auckland that is already over-serviced with EK's A380's and Air NZ...

Virgin Australia - Platinum

21 Dec 2012

Total posts 90

The trouble with this is, its only from certain destinations, Sydney being a prime one for example. Who wants to fly via Sydney when you can go direct with Virgin?

17 Feb 2012

Total posts 121

I think you will find them doing the same thing from Melbourne with the new 737's that are joining the fleet :)

Qantas - Qantas Frequent Flyer

17 Aug 2012

Total posts 2223

Indeed, and I expect to find OOL slowly worked back into the system - the 737s and 717s will open up more possibilities.

Anyway, it's not like Virgin offers direct flights from Launceston to Bundaberg...

undertheradar Banned
undertheradar Banned

28 Oct 2011

Total posts 662

And look forward to TT creeping into some of VAs 'timetables'

undertheradar Banned
undertheradar Banned

28 Oct 2011

Total posts 662

If I was QF, I wouldn't be too worried about this 'segmented survey'...but if ALL segments of travel on QF decreased...then I would be concerned.... And I gotta love it when 'analysts' predict a bigger loss for QF, compared to VA....ahhhhh...derrrr... QF has a bigger fleet/more routes, thus are exposed to more influences than VA

Qantas - Qantas Frequent Flyer

13 Apr 2013

Total posts 11

I had a CEO of large Australian company ring me this morning, one of the topics we spoke about was how irate he was with Qantas, "They aren't acting like a market leader there acting like a third grade side making changes to there business models without any insight to the consumer demands".

And as of last Monday the next 50 - 60 flights I'm doing will be with VA due to the better offering they have on their flexi fares and the reward program. The current business offering from Virgin out weights Qantas hands down. I flown Qantas - TAA for 40 plus years, treat consumers like crap and we move on.

undertheradar Banned
undertheradar Banned

28 Oct 2011

Total posts 662

and I have heard of PAX/businesses who switched to VA, and over time, discovered the VA 'grass isnt greener', and have switched back to QF

Thai Airways International - Royal Orchid Plus

15 Jan 2013

Total posts 304

I have to agree with you about the rewards program.For Instance can you earn points servicing your car at Midas with Qantas FF?The Answer is NO or what about places QF don't even serve in their own right anymore directly.Try live in Adelaide and you want to go to Singapore SIA I get points on in qualifying fare classes and there is plenty of other reasons I can think of.I have flown Business Class on the then Australian Airlines as a kid way back in 1989 and it was a lot better than what we have today Now It's turned since the Merger with Qantas across the board to crap and I only now fly the latter if someone else pays or the schedules are that little bit better.

"Ironically, Markiewicz adds that the customers preferred Qantas over Virgin Australia in every category bar price – but price has become the primary driver for corporate travel managers, which in turn has seen Virgin gaining ground due to its lower fares."

Result: Unhappy work force, particularly mid-managers and above who travel most and who will most likely find ways to circumvent the company preferred carrier!

09 Nov 2011

Total posts 88

Qantas are better at everythying bar price - what a load of garbage. I would pay more to fly Virgin rather than Qantas anyday. As for Qantas flying back to places they had previously stopped flying to?? Internationally, they have the least amount of services to all Australian Capital cities with the axe falling on Adelaide and Perth and reductions everywhere else including NZ. Again they have retreated from competition instead of facing it head on. The choice is simple for me and many corporates as they begin to experience the difference. Virgin lounges far better and less crowded than Qantas Clubs, all staff friendly with great customer ethics on the ground and on board. The Virgin expereince in Business class completely trumps Qantas on coast to coast routes, and Virgin's fleet is a great dealer younger than Qantas'

undertheradar Banned
undertheradar Banned

28 Oct 2011

Total posts 662

i love it when people compare VA/DJ (an airline with a 14yr 'history')....to QF(an airline with a 93yr history)

Qantas - Qantas Frequent Flyer

13 Apr 2013

Total posts 11

I agree but VA now ticks so many boxes, and we live in the present not the past and if I had my way I'd be on a Pan Am flight rather then pointing out were there office was.

Qantas - Qantas Frequent Flyer

25 Jan 2013

Total posts 246

I have to side with Derek on this one. Being the older airline does not entitle you to the oublics business, admiration or for that matter anything else.

Satisfy consumer demands and needs in a competative and feasable way. 

It is absolutely fantastic that people are loving VA. Hopefully the increase in demand would mean higher fares for VA vis a vis QF. That would provide us QF fans (I use the term loosely) the price justification to fly QF!

QF

11 Jul 2014

Total posts 491

I will go with what is the better option for myself the consumer.

Security Screening for Plat= Virgin 5 Qantas 2 (Brisbane  a big -1)

Boarding for Plat = Virgin 5  Qantas 4

Upgrades for Plat = Virgin 5 Qantas 5

Using Points = Virgin +5 Qantas 3 (I hope you like Jetstar)

Food is the same ,I'm fat enough anyway and I don't drink while traveling

Virgin Australia - Platinum

21 Dec 2012

Total posts 90

I cant agree on your last point there. I am Plat with Virgin and Gold with Qantas yet consistently get award redemptions more easily through Qantas. I am talking international J and F, lets face it the only awards worth taking. For example, I just booked Adelaide London with award points with 3 weeks notice and got first class for three of the four legs with Emirates and business for the London Dubai leg (the shortest as it turns out) with BA. The best Virgin could do was economy for three legs and business for Abu Dhabi - Sydney, meaning I still had to transit via Sydney before getting home to Adelaide, a horrible connection. Singapore Airlines are the major problem here as they dimply dont release many or any first or business award seats to Velocity. While I prefer flying Virgin domestically, the inability to get business or first redemption sometimes even up to 12 months out is seriously having me reconsider giving the bulk of my travel to Qantas. 

QF

11 Jul 2014

Total posts 491

Sorry I was talking domestic East Coast using points, International is a different story. Still the taxes are a killer on Qantas, considering I paid $1,400 per ticket X 4 return to New York in November last year with Qantas and they gave us 6 seats at the front of economy on the return leg (Thank you BA First Class check in staff in NY)

Virgin Australia - Platinum

21 Dec 2012

Total posts 90

Thats true the taxes are higher with Qantas, I paid $1,600 for my return trip. Still its around $17,000 worth of value and most importantly I was able to actually get the tickets! It really erks me that one of the reasons I started flying Virgin was because Singapore Airlines joined the alliance, yes I could fly direct from Adelaide to Asia. But what use are they if you can NEVER ever get redemption with them. I dont know anyone that has ever been able to get a J or F seat with them and economy is simply a waste of points, you may as well pay after taxes!

QF

11 Jul 2014

Total posts 491

The trip I spoke about in November from NY the cabin manager offered to push my wife and myself into business, my wife wouldn't leave the 2 adult kids in economy by themselves, seriously true story. Would have worked out to $700.00 for a business seat LA - Sydney.

12 Feb 2014

Total posts 230

Not sure how the comparison is even possible on all but price. Qantas is a step change better than Virgin. Almost comparing apples and oranges. Qantas has by far the better lounge in Perth (I don't know VA lounges elsewhere) and service has been consistently excellent for a sustained period now. The staff grumpiness appears to have worn off and the flight experience has improved significantly as a result. The check-in process is better and quicker than Virgin. Qantas just feels a more classy proposition. It is really hitting the mark more often now. I'm not surprised the survey shows it wins on all counts bar cost.

Qantas - Qantas Frequent Flyer

13 Sep 2011

Total posts 182

On a related note, I just checked in for BA SYD to SIN in F and using my new BA f/f number.  I mentioned how disillusioned I am with QF and their enhancements and she said that there is a sizeable shift away from qantas since they moved their UK flights to transit Dubai and even more since the f/f enhancements.  This isn't just her opinion, it is coming from her management.  Not sure who she works for at Sydney, she was in QF uniform though.  I would be interested if anyone else has heard this.

Qantas - Qantas Frequent Flyer

20 Sep 2013

Total posts 469

If the statement was made as you say ..she should be fired.


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