Virgin Australia and CEO John Borghetti deserve all due credit for creating an airline with wide and deep partnerships that has become a formidable competitor to Qantas. But Virgin Australia's claim that it has the largest network out of Australia is perhaps stretching the point.
Importantly, Virgin has put in its own qualification that this claim is based on seats, some of which are operated by its partner carriers. It is measuring itself and its partners against oneworld seats in and out of Australia.
This claim is now part of an advertising campaign but was mentioned in Aug-2011 at the carrier's 2011 annual results in the context of Virgin's network being "as big as oneworld in and out of this country", as Mr Borghetti said at the time. The claim was made possible by network changes from Qantas and British Airways, largely on the Kangaroo route, but as CAPA reported at the time, the comparison was skewed as Virgin was comparing all of its partners to only Qantas and its oneworld partners – and not its non-oneworld partners. The situation is no different today.
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Virgin Australia and its partners – Air New Zealand, Delta, Etihad, Hawaiian Airlines, Singapore Airlines and Virgin Atlantic – account for approximately 28% of capacity in and out of Australia (measured from next month when Qantas further restructures its international network).
Qantas and oneworld partners – British Airways, Cathay Pacific, Japan Airlines and LAN – account for 27% of capacity. But Virgin Australia's claim ignores the non-oneworld partners of Qantas.
Few are interested in Virgin's partners versus oneworld. The majority want to size the partners of Qantas and Virgin and then choose one Australian carrier to make their primary airline. For that, Virgin needs to include Qantas' non-oneworld partners: Air Niugini, Air Pacific, Air Vanuatu, Aircalin, Asiana, EVA, South African Airways (SAA) (included until a final determination is rendered regarding the Qantas-SAA codeshare) and Vietnam Airlines. Of course, not to be forgotten is the Jetstar Group, which Qantas frequent flyers can redeem on and, for a fee, earn points on.
That capacity brings Qantas and its partners to a 41% control of seats to/from Australia compared to Virgin Australia and its partners' 27%. Virgin Australia's claim is alluring nonetheless. It certainly reflects a massive change from where the smaller carrier was only 18 months ago.
Qantas vs Virgin Australia international capacity (seats) and share (%) in and out of Australia: May-2012F
Source: CAPA – Centre for Aviation & BITRE
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Well researched and written. Thanks for the clarification.