Let the battle begin

In the decade since Ansett Airlines nose-dived into bankruptcy, Qantas has faced no serious competition for Australia’s business travellers.

That’s finally changed with this month’s debut of Virgin Australia business class.

For shorter distances between Australia’s capital cities, is business class – regardless of how good it is – really worth the expense?

And that sound you just heard was a nationwide sigh of relief as The Red Roo loses its ransom-like claim on business travellers sitting at the pointy end of the plane.

Qantas has a decent domestic business class product, although it varies widely and wildly between aircraft.

But we all know that competition is A Good Thing. Look at how Telstra (or Telecom, as it was known in those days) changed its ways when Optus rode into town.

And as far as domestic business class goes, Qantas has enjoyed monopoly status matched with incumbent muscle in the corporate travel arena.

So Virgin Australia’s introduction of business class across its domestic fleet of Boeing 737s is not only welcome but overdue.

My first few flights on the challenger’s new business class show it’s worthy of the name, rather than being a jumped-up an ‘economy plus’ product.

Eight plushly padded leather-clad seats at the nose of the 737 replace the premium economy benches which the then ‘Virgin Blue’ rolled out in 2008.

They’re very comfortable and sport a surprisingly generous recline with 38 inches of ‘pitch’, a measurement of seat spacing by which frequent flyers judge legroom.

That said, on the majority of Boeing 737s in the Virgin Australia fleet – aircraft refurbished by replacing premium economy with the new business class seats – you’ll find seats in row 2 have more room to stretch out, compared to the close-fitted bulkhead wall in front of row 1.

Each seat has a power socket in case you want to keep your laptop juiced up during the flight and Virgin has also upgraded the in-flight service.

Morning newspapers, evening drinks plus six business class-only meals spanning from breakfast through to supper are all part of the mix in the compact eight-seat business class cabin.

The in-flight meals I’ve had to date in Virgin Australia’s 737 business class have all been consistently fresh and tasty, or what I classify as cafe-grade.

Virgin is also pulling out some big guns – or rather, big international-grade aircraft like the Airbus A330 – to compete against Qantas for the transcontinental trek between Sydney and Perth. The same aircraft will begin Melbourne-Perth services in May.

Of course, the Red Roo isn’t going to roll over as Virgin Australia chief John Borghetti chases the corporate travellers who represent the cream of airline revenue.

A recent Bloomberg report said that Qantas business class fares on the Sydney-Melbourne route had fallen by around 17 per cent in the past two months, while Virgin’s aggressively lower fares had seen average domestic business class prices tumble by 27 per cent.

Qantas has also made some strategic moves, such as running a Boeing 747-400 with its international-grade business class beds on Sydney-Perth flights to compete with Virgin’s Airbus A330.

And Qantas still has an edge on the ground, with its Business Lounges offering a better range of fare than the Virgin equivalents for that hour you spend sitting around before the flight.

This ‘battle for business class’ is great news for the estimated 2.1 million business travellers who shuttle between Aussie cities. 

At the same time, it raises a question. With most of Australia’s capital cities barely two hours’ flying time apart, is business class (regardless of how good it is) really worth the cost?

Sure, business class is always a much better way to fly than being jammed down the back of the bus. And on long flights from coast to coast, it’s no contest.

But consider Sydney-Melbourne, which is Australia’s busiest route (and also happens to be the fourth busiest air route in the world, according to industry analyst UBM Aviation).

The rack rate for a return business class fare on Qantas and Virgin Australia averages $1,100, while business-friendly ‘flexi’ fares hover around the $400 mark.

That’s a big difference for a trip that lasts barely under 90 minutes.

Likewise, to travel just over two hours between Melbourne and Brisbane, you can shell out $1,800 for business class or come in at less than $600 in economy.

(Again, that’s not even considering the cheapest tickets, which on that route can be around $150 each way.)

Val Feuell, from corporate travel firm Carlson Wagonlit Travel, suggests that very few business class passengers on domestic flights pay their own way.

“The vast majority of people seated in business class are either travelling for work or simply using their frequent flyer points,” she said.

BCD Travel’s Louise Wheeler adds that a large proportion of corporate clients flying business class domestically belong to the small-to-medium business market rather than larger global organisations, where short-haul travel policies request economy class travel either for all employees, or those below senior executive level.

High Flyer also polled Corporate Traveller, whose Nick Queale reckons “the mix of people at the front-end of the plane on domestic routes is a good mix of leisure passengers and those travelling for business on company-paid fares.”

He says that the combination of very competitive fares, more choice in this space and growing consumer confidence has corporates and leisure travellers willing to spend money on business class fares because they can see the value in it.

Do you travel business class within Australia – and if so, who pays your way and is it worth it? And how do you reckon Virgin Australia's new business class compares against Qantas?

David Flynn is a business travel expert and editor of Australian Business Traveller.

Twitter: @AusBT