Flights of fancy: battle for busiest air route

The Melbourne-Sydney run is exhausting - and lucrative.

MELBOURNE businesswoman Rita-Marie Hopfner hates flying, but as often as once a week, she rises at 4.30am and leaves her home in the eastern suburbs to head for the airport and catch a flight to Sydney.

"I hate airports. I hate them. I don't even like the smell of them. I don't like travelling," Hopfner says.

Yet, she's been a Qantas frequent flyer on the busy Melbourne-Sydney route since she founded skincare business La Clinica 17 years ago.

She believes videoconferencing is a poor substitute for personal contact: "I just find that meetings and negotiations are more effective and more personal when they're face-to-face."

Another Melbourne-based regular on the route, Siemens executive Matt McInnes, says the intercity commute is "as close to purgatory as I can find. It is the most horrible thing that I have to do on a regular basis."

They are among 7 million passengers who fly between the two capitals every year, making it the fifth busiest air route in the world and the nation's most lucrative for airlines.

Qantas and Virgin Australia know that many - probably most - people share Hopfner's and McInnes' views, and have stepped up their battle for corporate passengers by increasing the sweeteners available to them, including valet parking and luggage check-in.

Indeed, in the increasingly fierce campaign for passengers - especially on the 700-kilometre Melbourne-to-Sydney route - it is the perks that are proving a critical element of the battle.

The flashpoint came when Qantas chief executive Alan Joyce made the shock decision to ground his entire fleet on October 29 last year during the airline's dispute with its maintenance workforce over pay and conditions.

Virgin Australia chief executive John Borghetti saw his chance, and flew with it.

Joyce's bombshell came just five months after the renaming and reframing of budget carrier Virgin Blue, and Borghetti's declaration that the revamped airline intended to compete with Qantas on its own turf.

Within hours of the Qantas grounding, and with the travel plans of thousands of Qantas passengers in chaos, Virgin launched a rescue plan, adding extra planes and flights to its schedule.

"They got to see what we were doing and see that it was real. It was an opportunity that we had to capitalise on. And we did," said Virgin executive Merren McArthur, who co-ordinated the operation.

Nowhere were the implications of the crisis felt more keenly than in the country's main business hubs of Melbourne and Sydney.

About 7 million passengers fly between the two capitals every year. For the airlines, it represents enormous business, with the market leader Qantas offering 448 services a week and 95,000 seats. The insurgent Virgin has 358 flights a week, three times the number it had in 2002. The budget carriers - Qantas offshoot Jetstar, and Tiger Airways - also ferry thousands between the two cities, though their focus is on the budget-conscious leisure traveller.

For many intercity passengers, work demands they fly between the cities on a regular basis. "There are people who commute every day," says David Flynn, editor of the Australian Business Traveller website, adding that few confess to enjoying the experience."There is a subtle but certainly pervasive stress that comes with flying," he says.

Conscious of this, the airlines have stepped up their add-on perks in an attempt to lure new customers and satisfy their loyal ones.

Hopfner, a loyal Qantas customer, says the airline has improved in the past few years, when delays were more common and she was more likely to encounter unhelpful staff.

The biggest change is the range of airline extras that she utilises on every trip. "It's not just about making it bearable," she says. "I don't have to think about the logistics of the trip."

The mother of three often goes to Sydney and back in a day, and aims to be home to have dinner with her 14-year-old son. (Her two older children have left home.)

The airline's premium services, she says, "facilitates what I do during the day, from dropping the car off, the valet parking, then having a car to pick me up at the other end. Now I can even drop off my dry-cleaning at the valet parking if I want to."

Merren McArthur says Virgin is investing heavily in similar services to match the Qantas perks. The airline has opened an ultra-modern lounge at Melbourne airport, with a similar facility to come in Sydney. It has also introduced valet parking and express check-in services.

"Absolutely critical," McArthur says of the little extras. "I can speak from my own experience. I fly at least two or three times a week. Air travel is a pretty demanding experience and a pretty demanding [part of] a working day so whatever the airline can do to streamline it and make it efficient and make it reliable is really critical."

But for some travellers, the bells and whistles come a distant second to their desire to arrive at their destination on time. Sydney-based IT sales manager Chris Weber, who flies fortnightly, says he is regularly plagued by flight delays of 20 to 30 minutes.

"Some [delays] are excusable and some aren't. Just using the excuse of 'the last plane was late so that's why we are'? Why was the last plane late? I don't really find their reasons or excuses in line with delivering a high level of customer service … They've improved a little in the past six months but nowhere near where they were five or six years ago," he said.

In reality, less than 10 per cent of flights on the route are delayed, which the industry defines as arriving or departing within 15 minutes of the schedule. And while most passengers can recall the pain of having a flight cancelled, only 2 per cent of all flights on the route never take off.

Lyell Strambi, who heads Qantas Domestic, says the airline is investing heavily in improving everything from staff training to the planes themselves. And while Strambi admits the Virgin Australia assault is ultimately a good thing for Qantas - "the good thing about competition is that it forces you to lift your game" - he is dismissive of the notion that the Flying Kangaroo is under serious threat.

He reserves his most curt words for Borghetti, who left Qantas after a three-decade career - and then popped up as head of Virgin Blue in 2009.

"They're definitely coming after us but they've got a lot of ground to make up and we shouldn't overstate their success so far, they've got a long way to prove themselves," Strambi told The Sunday Age. "We're going to defend our turf very aggressively."

Of the new Borghetti strategy, he adds: "You've got to remember the reason they've changed their business strategy is because their previous one failed."

But customer loyalty is what will keep Qantas well ahead, he says.

Unsurprisingly, Merren McArthur rejects Strambi's analysis of Virgin's strategy and prospects. "We have made enhancements with cost efficiency in mind and as a result the customer benefits from more competitive fares," she says.

Fuelling Virgin's confidence - and adding to Qantas' recent image woes - are once-unthinkable headlines, like this from last week: "Virgin beats Qantas on domestic routes", reporting that for the first time Virgin had carried more domestic passengers than its rival over a 12-month period. Qantas declared that if you included subsidiaries Jetstar and Qantas Link, it was ahead by a mile.

The airline is clearly sensitive, the wounds from a disastrous 2011 still raw. Qantas knows it has taken a serious image hit, a reality reinforced by the May release of research agency AMR's annual Corporate Reputation Index, a survey of Australia's most reputable brands.

Qantas languished in 25th spot, plunging from eighth the previous year. But for Virgin Australia and for Borghetti, there was validation of their year of living boldly: the airline leapt from 13th place to sixth.

Borghetti has made it "incredibly competitive", says David Flynn - and he's done it by being as bold as he was on that chaotic October day last year.

"Virgin got incredibly serious and competitive and basically painted a target on Qantas's chest," Flynn says. "They're playing all their cards right. And that's partly because John Borghetti knows the Qantas playbook, because he helped write the thing."