Gas Prices Add Fuel to Fire of Airline Rivalry

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As the airline industry suffers the ravages of soaring fuel costs, Australia’s two largest carriers are both trying to boost their position in the lucrative Sydney to Los Angeles route.

Qantas Airlines Ltd. is the dominant carrier from Down Under to LAX, but will soon be facing competition from V Australia, a subsidiary of Virgin Blue.

Earlier this year, Qantas announced that it is making the switch from the fuel-guzzling Boeing 747 to the fuel-efficient Airbus A380, which will make its first flight out of LAX to Sydney on Oct. 20.

Because the A380 can hold about 30 percent more passengers, Qantas will cut its flights to Sydney to 15 from 17. It also currently offers 14 flights per week from LAX to Melbourne as well as a daily flight from LAX to Brisbane.

“This latest increase in capacity confirms our confidence in the growth potential of this important international route,” John Borghetti, Qantas executive general manager, said in a statement.

The A380 could help Qantas build on its dominance of the Sydney-Los Angeles route before V Australia begins offering service Dec. 15.

Virgin wants to get Australia’s business travelers to L.A. at more convenient times. United and Qantas, its two major competitors on the route, arrive early or late in the day. Virgin will time its daily flights to arrive in L.A. midafternoon.

While rates will be 20 percent to 30 percent cheaper, a Virgin executive said that wasn’t the primary competitive factor.

“It’s not all about cost, it’s about comfort and quality as well, and we feel like we can compete on all aspects,” said Mathias Friess, general manager of sales for Virgin Blue.

Friess acknowledged that the new route was a significant factor in the company’s future.

“Success of the Sydney to Los Angeles route is crucial to the success of Virgin Blue.”

A Qantas executive said competition would help boost the market.

“We view increased competition from Virgin on the L.A. route as an opportunity for market growth and the further development of Australia’s aviation industry, as well as helping increase trade and tourism between Australia and the U.S.,” said Wally Mariani, a Qantas executive.

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