Qantas plunge highlights the secret airline fare war

There is a new but secretive price war raging among Australia's domestic airlines. Stage two in this battle has kicked in as airlines are now cutting back on capacity growth. Monday Qantas was the first to fess up to clipping its own capacity growth wings. It had planned to add 2% more seats in the January-June period, in its combined Qantas and Jetstar domestic brands. This growth target has been reduced up to 75%. Virgin doesn't give capacity numbers but industry sources say it has also been paring back growth in the number of seats on offer. Qantas domestic flights booked for April had fallen about 8% and flights for May had dropped about 15% compared with the same period last year. The announcement from Qantas ignited fears the Australian airline duopoly might revisit the bad old days of a few years back when irrational fare pricing and oversupply of seats cost both the players hundreds of millions in profits. <br/>