Yields data confirmed that Qantas continues to lose heavily even in the once-profitable domestic operations. According to reports, Qantas suffered a 0.8 per cent decline in its international operations in monthly yields and an even larger 1.3 per cent for its domestic operations.

The decline was registered even if Qantas and Jetstar increased flight frequencies and used larger jets on domestic flights. The figures appear to confirm the profit downgrade warning issued by the flag carrier a few months ago to as much as 91 per cent for 2011-12.

The data also confirms that Virgin Australia is slowly eating into Qantas domestic operations, which would be further be challenged by the addition of Tiger Airways of more seats after the latter launched its Sydney base on Monday.

Analysts expressed surprise with the data since they considered Qantas's international operations as the weaker one.

To improve Qantas financial viability, the company revamped its corporate structure into four main divisions made up of international and domestic operations, Jetstar and frequent flyers programme. It also launched on Friday a new advertising campaign by adopting a new tagline, Spirit of Australians, and painting the name of Australians on the side of its A380 or B737 aircraft.

Tiger also launched its first TV ad campaign and the Singapore-based budget carrier seeks to gain a larger slice of the Australian domestic market, while a marketing manager of Qantas reported on Friday at the launch of the air carrier's ad campaign that he saw a competitor board a Qantas jet in 2011.

Lewis Pullen, Qantas executive manager of marketing, said he saw Virgin Australia owner Sir Richard Branson aboard a Qantas plan in Auckland during the Rugby World Cup held in New Zealand. However, Virgin said the company's founder flew Qantas in the past to check on the competition and compare the difference between the two air carriers.

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