Fiji Airways is angry at Qantas, the Australian airline that owns a 46% stake in it. Is the anger justified or just another example of protectionism?
Earlier this year, Qantas started flying 4x/week between Sydney and Nadi, Fiji, the hub for Fiji Airways. At the time, Fiji Airways called it an odd move, noting the sizable majority stake Qantas holds and the fact that the two have been codesharing on the route for 17 years.
Now Qantas will up its service to Australia to daily. This is both alarming and angering to Fiji Airways Chief Executive Officer Andre Viljoen. He told the Sydney Morning Herald:
It is certainly alarming when your major shareholder and long-standing commercial partner all of a sudden becomes your major competitor. Qantas’ sudden flip from ally to adversary has been very damaging for Fiji Airways. It is competing aggressively, actively directing passengers onto Qantas and Jetstar services.
He noted “flat” demand to/from Australia and added that Qantas is unlikely to profit and will only hurt the environment:
We estimate that Qantas will struggle to turn a profit on the route. Adding additional daily flights just means that there will be more half-empty flights traveling between Australia and Fiji. This is not good for business and certainly isn’t good for the environment.
Qantas insists it is not acting aggressively, noting the daily flights will only be over the Christmas and New Years period and that it “remain[s] committed to that arrangement”.
But Viljoen insists the move is a “race to the bottom” that will hurt the Fijian economy.
Fiji Airways is a vital contributor to the Fijian economy, as well as the regional economies of neighboring South-West Pacific States whose economies, like Fiji, are highly dependent upon tourism and trade. The public should be aware that this race to the bottom only stands to damage the economic stability of one of their favorite holiday destinations, to the great detriment of the Fijian people.
On the surface, Viljoen’s logic makes sense. At the same time, it always sounds like the standard whining we hear from Delta over competition from Gulf Carriers…nothing but unabashed protectionism. The delta here, if you will, is that Qantas owns nearly half of Fiji Airways. It seems odd that Qantas would deliberately undercut itself if the extra demand was not necessary over the peak holiday period.
Do you side with Qantas or Fiji Airways in this debate?
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