Virgin Australia managed to fill more seats in March than the prior year despite Easter having moved to April this year in part because it cut some capacity in its mainline operations, in contrast with rival Qantas Airways.

The airlines are locked in a fierce capacity battle which has recently shown signs of shifting to their respective budget operations Tigerair Australia and Jetstar more than their mainline brands that attract corporate travellers.

The latest data from the Bureau of Infrastructure, Transport and Regional Economics showed its index of domestic business class fares had risen to the highest level in more than a year in April and all fare classes, including discount economy, had risen.

In its March traffic statistics, Virgin said it had continued to post positive yields, or returns on fares, since the start of the financial year as it attracts more government and corporate business.

Qantas has reported declining yields, as the battle over capacity at a time of relatively weak demand has placed pressure on airfares.

Virgin’s March traffic statistics showed its load factor, or the percentage of seats filled, increased by 2.6 percentage points to 76.5 per cent in the domestic market in March and has remained in positive territory for the year to date.

Part of the improvement in loads could be attributed to the airline cutting its mainline domestic capacity, which includes its regional operations, by 1.8 per cent during the month. In contrast, Qantas boosted its combined mainline and regional capacity by 3.3 per cent even though the higher demand Easter period had shifted to April.

At the budget end of the market, the increases in capacity were much larger. Tigerair lifted its available seat kilometres by 20.4 per cent in March in a move that placed pressure on its load factor. The increase was due to higher utilisation of aircraft and the addition of its 12th A320 in March. Overall, Tigerair’s load factor fell by 3.4 percentage points to 82.1 per cent.

The budget carrier last week announced plans to quit its underperforming Sydney-Alice Springs, Melbourne-Alice Springs and Melbourne-Sunshine Coast routes in favour of boosting capacity on flights from Sydney to the Gold Coast.

Qantas’s low-cost arm Jetstar increased its capacity by 7.6 per cent in the month of March, with its load factor falling by 2.8 percentage points to 80.4 per cent.

Overall, Qantas had a 63.8 per cent share of domestic capacity in March, just shy of its target of 65 per cent. Qantas has said it expects its domestic capacity to rise by 3 to 4 per cent in the second half. Virgin has not given any capacity guidance, which it attributes to Qantas’s strategy of vowing to match any of its capacity increases.