Qantas Decline Continues As Virgin Australia Impacts Operations

The battle between two airline companies, Virgin Australia and Qantas, has taken a toll on the latter’s international and domestic operations, as Qantas’ yields continue to decline.

The company, which experienced a slight increase of up to four percent in at least 11 months in its domestic operations last May, has been transparent about their operations.

In fact, the airline even said that it was expecting company profits to fall hugely, or as much as 91 percent, by the end of June of this year.

The minimal improvement, however, is the result of an increase in flight frequencies and the use of bigger planes for domestic travels.  Qantas’ international routes, meanwhile, have remained relatively flat.

Share prices for the Qantas are expected to have a “limited upside” according to analysts, as the company moves to aggressively increase flights and capacity.  But its forecasted growth is seen to be nowhere but downwards.

Since November 2009, the airline suffered declines of around 0.8% in international operations and 1.3 percent in domestic operations, competing against Virgin Australia.

Qantas’ domestic operations also include budget airlines like Jetstar and QantasLink and analysts believe that it’s Jetstar that continues to perform better.

Despite all these, however, Qantas actually showed an increase in shares yesterday, as it rose 2.5¢ to $1.10. Meanwhile Virgin’s share fell 0.5¢ to 38.5¢.