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UPDATE 1-Qantas does not plan to remove booking change fees permanently - CEO

* Qantas offering temporary fee relief, U.S. carriers permanent

* Fares could rise to compensate for business travel downturn

* Domestic capacity seen to be 30% of normal by Christmas - CAPA (Adds details on airfare forecast)

SYDNEY, Sept 2 (Reuters) - Qantas Airways Ltd does not plan to permanently remove booking change fees, as major U.S. airlines have done, because it would damage its ability to manage revenue over the longer term, its chief executive said on Wednesday.

The Australian airline has temporarily waived the fees, even on its budget offshoot Jetstar, to provide passengers with more flexibility during the pandemic. But United Airlines Holdings Inc , American Airlines Group Inc and Delta Air Lines Inc this week announced plans to do so permanently.

“I think when certainty comes back I am of the view it is a big part of how we revenue manage and yield,” Qantas CEO Alan Joyce said of the fees at the CAPA Australia Pacific Aviation Summit.

“If every airfare is going to be flexible, your revenue management system I think fundamentally breaks down over the long term,” he added.

Joyce said the airline’s immediate focus was on adding flights that covered their cash costs, but that it would later lift ticket prices to help return to bottom-line profitability.

An expected hit to business traffic, driven more by economic downturn, is likely to lead to the airline to charge higher fares over time, he said.

“People may not even notice it,” Joyce said of potential A$10 ($7.35) or A$20 increases to domestic fares.

The airline is running only about 20% of its usual domestic capacity because of state border closings.

CAPA Managing Director Derek Sadubin said the Australian domestic market was forecast to return to 30% of 2019’s capacity levels by Christmas. ($1 = 1.3605 Australian dollars) (Reporting by Jamie Freed Editing by Shri Navaratnam and Gerry Doyle)

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