It’s a case of all change for air travellers, and airline investors and workers in the new year.

The knee-capping of frequent flyers by tight-fit, low-fare cabins will become normal, in fact, has already become so for those whose companies have cracked down on luxury fares.

Taking into account all the recent Qantas announcements, more than two thirds of the growth in its domestic services will be by its Jetstar brand in 2010.

In the Qantas group November operating statistics as measured by available seat kilometres or ASMs, Jetstar was 39.3% as big as Qantas mainline. On international routes Jetstar, is by the ASM metric 24.9% the size of Qantas, which is quite remarkable considering that Jetstar doesn’t yet fly very long-haul routes such as those to Europe or the US west coast.

And within the Qantas long-haul fleet, business-class seating will be scaled back to make room for double or more the number of premium economy seats and there will be more first-class service closures.

Another pointer to the lack of space to come for domestic flyers was the Jetstar announcement of a $5 fee for which those using its cheapest fares could book front-of-the-Airbus seating previously reserved exclusively for “flexible” (read expensive) fare users.

The logic is inescapable. As the “good times”come back with increased business flying on domestic routes, the luxury business air fare is not coming back at nearly the same rate, and companies that have shut the books on $700 fares for 70-minute flights will nevertheless allow executives down-traded into $100 fares to pay small change for the better seats in a single-class cabin.

And Jetstar is where Qantas makes its real money in a much changed air travel world, and wins its growth.

This strategy is linked by Qantas to the overt intention of wiping out those pilots and flight attendant jobs that are linked to legacy pay scales and conditions. All too late,  the Australian & International Pilots Association (AIPA)  has seen clearly what has been blindingly obvious for some time, in trapping itself in a cul-de-sac constituency of primarily looking after the full service section of Qantas operations, the very operations being eaten alive by the rise of lower cost alternatives on domestic and international routes worldwide.

AIPA is taking Qantas to court under the Fair Work Act, over its replacement of Australian pilot jobs by lower paid NZ pilots on trans-Tasman services.

The case is of wide-ranging importance beyond the airline sector, but unfortunately, there is no solidarity among pilots, especially when it comes to knocking off positions held by AIPA members, and the union made matters worse in the past by doing deals that made it easier for Qantas to shift those flying jobs offshore through its New Zealand subsidiary.

It is not clear if the courts will recognise AIPA as having any entitlement to bring the action.

Over in Virgin Blue, the latest guidance, of a return to profitability in the current financial year, also confirms the conviction of the market that its domestic services are making good money.

They must be in order to counter the remaining start-up costs associated with the V Australia launch into the Australia-US market.

Virgin Blue has made it clear that the trans-Pacific operation has benefited from strong customer acceptance, and some signs of rising yields and will perform better once its joint venture to share those routes with the world’s largest airline, Delta, gains the expected US regulatory approval.

Virgin Blue now flies to more domestic destinations than either Qantas or Jetstar, and is the only carrier to offer a premium product on all flights. This key difference between a Virgin brand that fits all, versus the tensions between the budget Jetstar/Qantas full service brands is set to define the competitive battle for frequent flyers within Australia in 2010.

Which leaves Tiger struggling badly, as it pays for its running costs with the cash from forward sales of fares at levels that saw it bleed  tens of millions of dollars in Australia to the end of March this year, in a financial report it has for two years in a row not provided in a timely manner.

What Tiger will do in 2010 is unknown. The company recently suggested passengers should really check in for flights as much as two hours before departure instead of before its published 45 minutes cut-off time, which makes its much trumpeted high frequency entry onto the Melbourne-Sydney route seem to be framed to discourage business travellers.

Reports from Asia also make it clear that there is no investor appetite for a proposed $US500 million IPO by the Singapore Airlines-controlled low-cost franchise, with the latest suggestions being that it will seek less than half that amount.