JUST 10 years ago Qantas dominated international air travel in Australia, carrying more than a third of all passengers in and out of the company's home market.
Successive waves of overseas rivals, led by the state-owned airlines of the Middle East and lately by China's national carriers, have left the Flying Kangaroo's market share in tatters.
Last year, Qantas carried 19 per cent of international passengers, while Dubai's Emirates has pushed up the league rankings to be Australia's fourth biggest airline with 8.1 per cent.
Emirates plans to keep expanding: the airline's vice-president for Australasia, Barry Brown, told the Herald the airline planned to hire 90 staff, all cabin crew, every week for the next seven years - a total of about 33,000 new hires, more than Qantas's entire workforce.
While Qantas has lost passengers to its own budget brand, Jetstar, and new budget airlines Pacific Blue and AirAsia X, it is Emirates that has gained most.
It boasts a 159-strong fleet, flying to more than 100 destinations in 66 countries. Qantas has 156 planes, but flies to fewer destinations, 77 in 17 countries, a spokesman said. (see graphic below)
To build its grip on the Australian market, Emirates has spent nearly $200 million on sponsorship deals since 1996.
An IBISWorld senior analyst, Ian MacGowan, said state-owned airlines have long been part of the competitive landscape. Qantas itself was formerly owned by the government.
But he said the growth brands in recent years have been state-owned, as Middle Eastern airlines such as Emirates, Etihad and Qatar Airways have capitalised on their location between Asia and Europe to build airport hubs ''in the middle of a lot of the action''.
Qantas is also under pressure from rapidly expanding state-owned carriers flying out of China, which are pursuing an aggressive expansion strategy built on a booming outbound tourism market.
Speaking earlier this year at an Australia-China tourism summit, the Tourism Minister, Martin Ferguson, said more than 450,000 Chinese tourists visited Australia last year, up 24 per cent from the previous year.
Air China operates 18 flights weekly between Beijing, Sydney and Melbourne, and intends to increase to 28 flights by 2015. China Southern Airlines has embarked on an even more ambitious expansion, planning new routes to Cairns, Perth and Adelaide that will almost double its flights to 50 a week by 2013.
As passenger numbers have risen, the increased competition has led to a fall in the price of international air travel of an average of 5.3 per cent a year for the past five years, IBISWorld research shows.
Qantas complains it is competing against overseas airlines who pay their staff far less, but Mr MacGowan said there had also been ''a change in who's travelling and where we're travelling to, which the airlines also need to adapt to''.
''Lowering the costs but running the same routes may not necessarily be the best outcome for them - they also need to look at what routes they're running to where, who they're flying and why they're flying.''
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