A battle over business class seats has broken out between Australia's two domestic airlines who are pulling out all the stops with new technology and perks to lure executives into the front of their planes.

Qantas Airways will next week start trialling a high-tech frequent flyer card to enable passengers to check in for flights within seconds and skip queues at airports.

Passengers can touch their smart cards on scanners as they pass through the airport terminal and will be sent details of their seat number, flight time and departure gate in a text message to their mobile phone which acts as a boarding pass.

Qantas also said it would be the first airline in the world to trial a new electronic tagging technology for passenger luggage, removing the old-fashioned printed baggage tags.

"Now we are creating a process at the airport for our premium customers that will make check-in so smooth and easy it basically disappears," Qantas executive manager for customer experience Alison Webster told reporters.

However, there is a catch. Passengers will still have to queue to pass through security and the new technology will only be available to 100 000 of Qantas highest-paying travellers initially.

Qantas' smaller rival Virgin Blue is also on the hunt for more business-class passengers.

Its new chief executive John Borghetti is a former Qantas executive with a passion for fast cars and good suits who spearheaded a revamp of that airine's first and business-class lounges.

Borghetti, who has poached some top Qantas staff to help him, is now planning an overhaul of Virgin Blue's cabins and uniforms as part of plans to double its share of the business-class travel market in Australia.

Virgin Blue started as a budget carrier a decade ago and Borghetti now wants to take things the other way by replacing the the carrier's "premium economy" seats with a regular business-class offering.

However, Virgin does not want to copy Qantas which has traditionally dominated the business-class travel in Australia where it currently has around 90 percent market share.

"We're not going to have stroganoff in business class that happens to be the same as what is served in economy but on a bigger plate," Borghetti told a recent stockbrokers conference.

Traditionally, there has only been room for two airlines in Australia's relatively small domestic travel market.

Qantas and its low-cost offshoot Jetstar have a 65 percent market share but faces increasing competition from Virgin and low-cost carrierTiger Airways Holdings. Airfares are falling as a result. - Reuters