Summary
- Qantas and Jetstar are set to dominate Australian flights to Bali with a 100% share of additional capacity.
- Virgin Australia left with zero extra seats due to not meeting criteria under current bilateral agreements.
- Commission proposing to grant more capacity to Qantas Group for Bali flights, pending final determination.
Australians’ love of all things Bali is back in full swing, and with seats at a premium there is a battle between the Qantas Group and Virgin Australia for more capacity. Faced with a choice between the two, the regulator who decides these things is leaning towards giving Qantas and Jetstar 100% of the available additional capacity, leaving Virgin Australia out in the cold.
A hotly contested route
Under the bilateral agreements with Indonesia, Australian designated carriers can operate up to 25,000 seats per week in each direction between Indonesia and Sydney, Melbourne, Brisbane and/or Perth. However, no seats are available for any new allocation to and from any of those four cities, but there are 2,500 weekly seats available for allocation with the requirement that such international services operate via or beyond to a point in Australia other than the four major cities.
Photo: Michael Doran I Simple Flying.
The additional capacity requires an international service to be in operation at all three points (departure, intermediate and arrival) to encourage international services into Australia’s regional international airports. In reality, that is throwing up some interesting routes, such as the Qantas bid to fly Cairns-Melbourne-Denpasar (Bali) or Adelaide-Perth-Denpasar and Virgin Australia’s offer to operate Gold Coast-Perth-Denpasar or Adelaide-Perth-Denpasar.

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These things are decided by Australia’s International Air Services Commission (IASC), which has already carved up the existing 25,000 seats by giving Virgin Australia 4,924 weekly seats and Qantas/Jetstar 20,076 seats. Qantas also has another 2,148 seats for the exercise of beyond traffic rights with 12 weekly frequencies, seven of which can be used beyond Indonesia from Denpasar.
No way in for Virgin Australia
With such an imbalance, it seems logical that Virgin Australia might have expected their bid for 2,464 extra seats to be a winner, but last week the IASC said it is proposing to allocate 2,320 of the 2,500 seats to the Qantas Group and zero seats to Virgin Australia (VA). Of course, it is not as simple as I have made out, and the Commission has found that VA’s bid does not meet the criteria set out in the agreements, particularly those relating to an international service at all three points.
Photo: Wirestock Creators | Shutterstock
The concern is that VA proposes to clear all passengers and cargo through customs, immigration and bio-security in Perth and operate the sectors within Australia (between Adelaide/Gold Coast and Perth) from the domestic terminals, which is not allowed under the provisions of the Indonesian agreements. Under the rules, the Commission is not allowed to allocate capacity where the applicant is not likely to obtain all the operational approvals to operate the service, effectively ruling out VA’s application.
It proposes to grant the capacity to the Qantas Group for five years, which said it will be used by wholly-owned subsidiary Jetstar. The low-cost carrier plans to operate an additional ten services per week between Australia and Indonesia using 232-seat Airbus A321LR aircraft, as follows:
- Seven frequencies (1,624 seats equivalent) to service Cairns-Melbourne-Denpasar from 1 May 2024; and
- Three frequencies (696 seats equivalent) to service Adelaide-Perth-Denpasar from 1 August 2024.

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At this stage, the Commission has said it proposes to make this determination in favor of the Qantas Group, and there are indications that VA is prepared to accept its call. However, the draft has now been released, and interested parties can now make submissions, although they only have five days, or until June 20 to lodge them.
After that, the Commission will consider the submissions and issue its final determination, which will most probably give Jetstar close to 2,500 extra seats per week to Bali, leaving Virgin Australia to find other international destinations where it can use its Boeing 737 MAX 8s.
What do you think of this decision? Let us know in the comments.