Qantas, Virgin in battle for business class

PASSENGERS celebrating the prospect of lower fares on domestic flights are in for more treats in the coming months as Qantas and Virgin Australia step up their efforts to boost their inflight technology.

As Australia's two largest airlines head towards an all-out price war on domestic routes, they have been doing their best to ensure they will be able to offer more than just an inflight entertainment system, especially for business-class passengers. After a trial last month, Virgin intends to offer Samsung tablet devices - which will be preloaded with movies, TV and audio programs - to business passengers by the end of June. The wireless devices will be made available to economy passengers for a yet to be disclosed fee.

Virgin will also roll out a new Wi-Fi system later this year on its aircraft, which will allow passengers to access inflight entertainment from their own laptops and other electronic devices.

The airline is still weighing up whether to offer wireless internet connections on domestic flights, but it is problematic because some passengers prefer to be out of reach while in the air.

Australia also lacks sufficient numbers of ground stations, which means it will have to turn to more expensive satellite technology to connect passengers to the internet if it decides to do so.

As part of its own trials, Qantas has been handing out iPads to passengers - including those in economy - aboard one of its Boeing 767-300 aircraft since January.

It gives them access to more than 200 hours of entertainment but not an internet connection. Qantas is still deciding whether to make iPads available on its wider domestic fleet.

Although it has been trialling Wi-Fi internet connection on six A380 superjumbos flying from Sydney and Melbourne to Los Angeles since March, Qantas said yesterday that it did not plan to make it available on its aircraft which fly domestic routes.

''They are certainly going the extra mile,'' Peter Harbison, the chairman of the Centre for Asia Pacific Aviation, said of the airlines' improvements to their on-board technology.

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''This is particularly about targeting the business traveller. It is a battle for the high-end.''

The battle for business travellers threatens to crimp the earnings of both airlines this year as an increase in capacity is set to force them to discount fares.

Qantas launched a sale at the weekend of business-class fares for both domestic and international flights, in a sign it is willing to take a short-term hit to yields in order to defend its market position.

But a Macquarie Equities analyst, Russell Shaw, said a substantial increase in capacity by Qantas over the next six months in the domestic market was ''a risky move'' for both its yields and passenger loads.

Shares in Virgin closed up 1.5¢ at 43.5¢ yesterday in a sluggish market while Qantas rose 1¢ to $1.52.