The passenger was tackled by Virgin Australia crew and handcuffed before the plane landed.

Shedding seats: The airline cut capacity by 1.5 per cent in April. Photo: Peter Rae

A heated battle between Virgin Australia and Qantas over domestic market capacity is showing signs of cooling, with Virgin cutting the number of available seats for the third consecutive month.

The two airlines have been aggressively increasing the number of domestic flights and the size of planes on longer routes, with Qantas desperate to protect its market share, at the expense of profit.

But Virgin's latest monthly operating statistics suggest a cease fire, or a return to ''normal'' market conditions.

It comes as Qantas began a round of lay-offs, announced earlier this month, calling for 100 voluntary redundancies for pilots of its ageing 767 and 747 aircraft on Monday.

The airline cut capacity by 1.5 per cent in April compared with the same month last year, according to its own measure of available seats as opposed to the industry standard of available seats per kilometre. This brings the total decline for the financial year to date to 1 per cent.

Using the industry standard, April saw a 0.5 per cent drop compared with the same month last year, but a gain of 2.3 per cent in the financial year to date.

The release of the figures came after Qantas said last week it would freeze domestic capacity in coming months, citing weak consumer confidence and a slowdown in the mining sector. The decision abandoned its strategy of maintaining its 65 per cent share with the airline's chief executive Alan Joyce saying he was comfortable with 63 per cent.

This is despite Qantas chief financial officer Gareth Evans saying in January that ''stepping back from the 65 per cent would effectively be waving the white flag''

And Macquarie analyst Sam Dobson said Qantas appeared to be losing market share, considering capacity across Virgin's entire group, with includes Tigerair rose 0.3 per cent, while its revenue grew 4.3 per cent.

Tiger posted a 30.5 per cent increase in capacity in April after it introduce flights from Brisbane to Darwin and Cairns, and Sydney to the Whitsunday coast during the month.

''While the numbers are impacted positively by the timing of Easter in April 2014, the trends suggest that Virgin is taking share from Qantas domestically,'' Mr Dobson said.

Although Qantas has shown its hand, Virgin has maintained its position of not providing any guidance on capacity.

Group chief executive John Borghetti said at the airline's annual meeting last November that its capacity had grown while it had completed a three-year transformation of its network, which included increasing the number of flights on popular routes, growth in regional areas and introducing wider-bodied aircraft on longer routes.

''As we have completed the major transformation of our domestic network, we are focused on maintaining the flexibility to adjust to changing market demand, while continuing to improve our yield mix by attracting more corporate traffic,'' Mr Borghetti said.

''On this basis, we are not providing guidance on domestic capacity growth beyond the first half of the 2014 financial year.''

 

 

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