Virgin Australia believes its lower cost base, airport turnaround time and capacity buffer will help it win against Qantas if a price war on domestic Australia airfare breaks out. Virgin also expects to be able to cut costs faster.
Virgin officials opined this after their ongoing price war, started in 2011, in the domestic business sector resulted in fare cuts of 25%.
While price wars can damage both airlines, Virgin maintains that profitability is its main objective and acknowledged that obsession with market share can lead to bankruptcy. Qantas disputes claims of Virgin’s speedier turnaround times and maintains Virgin has experienced rising costs.