Australian flag carrier Qantas (ASX: QAN) is determined to regain its lost glory as the country's premier airline. In a bid to get a larger slice of the domestic market it partly lost to Virgin Australia, Qantas said it will double the capacity for every plane that Virgin deploys.

The fight for more domestic flyers comes amid aircraft and lounge upgrades by both air carriers as Virgin tries to attract more corporate passengers by boosting its presence in the high-end market. However, excess capacity had actually affected both carriers.

"We've made it very clear we'll be sensible in terms of capacity. But if a competitor puts one (plane) in, we'll put two in as a group . . . We're not about to move aside and let anybody walk into our markets without a competitive tussle," Qantas Domestic Chief Executive Officer Lyell Strambi said.

With the addition of wide-bodied aircraft by Qantas and Virgin, competition became tougher, particularly in the east-west routes, and business class fares have gone down by up to 40 per cent.

As part of Qantas's aggressive move to retake the domestic market, the air carrier would make available only A330 wide-bodied jets for its weekday trips to Sydney and Melbourne and offer new lie-flat premium seats to match a similar offer by Virgin.

For its part, Virgin is battling Qantas's efforts by asking the competition watchdog to block Qantas's proposed alliance with Middle Eastern carrier Emirates on the profitable trans-Tasman route.

However, Virgin has its own problems at the Australian Competition and Consumer Commission which delayed its decision to approve Virgin's 60 per cent takeover of Tiger Australia. The decision was originally due on Thursday, March 14, but the commission asked for more information from Virgin, particularly its impact on competition in the domestic market.

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