Both Qantas Group and Virgin applied for extra capacity to Denpasar in November, with the IASC currently intending to side with Qantas and Jetstar on the basis that they, and not Virgin, “are reasonably capable of obtaining any licences, permits or other approvals required to operate on and service the route, and of using the capacity that may be allocated under the determination”.

“The Commission notes that this finding does not impact upon Virgin Australia’s existing operations on the Indonesia route, or its ability to utilise existing capacity allocations issued by the Commission in favour of Virgin Australia,” the draft reads.

Qantas plans to start daily Jetstar services between Cairns–Melbourne–Denpasar and three flights per week between Adelaide–Perth–Denpasar, using its new fleet of A321LRs; Virgin, meanwhile, intended to operate two daily services from the Gold Coast and Adelaide to Bali, both via Perth.

“We welcome the draft determination from the Commission, which will mean there will be even more low fare options for customers travelling to Bali from across Australia,” a Qantas Group spokesperson said in a statement.

In a statement, a Virgin spokesperson noted the IASC’s draft decision.

“Virgin Australia supports and looks forward to a successful resolution of bilateral negotiations between Australia and Indonesia to add further capacity between the two countries,” the spokesperson said.

“We remain committed to bringing greater competition, value and choice for Australian travellers to Bali.”

The decision came despite the ACCC speaking up in favour of Virgin on the basis of increased competition and consumer choice; both the TWU and the FAAA also backed Virgin over Jetstar, arguing that Virgin’s use of Australian-based crews would provide more jobs for local workers.

ACCC general manger Katie Young said giving the flights to Virgin would be more conducive to competition, with Perth–Denpasar being Virgin’s first international service from the west coast since the pandemic.

“This proposal would introduce Australian competition between Perth and Denpasar, as well as reduce Jetstar’s dominance on services between Adelaide and Denpasar. It would also introduce competition for domestic connections between Gold Coast and Perth,” Young wrote.

Submissions are open on the draft determination until 20 June, with the Commission halving the normal submission period of 10 business days.

“Having regard to the commercial interests of the applicants and the time elapsed, to expedite the application process, the Commission has shortened the submission period set out in the administrative procedures to five business days (instead of 10 business days),” the Commission said.