Qantas Airways will add extra economy seats to their domestic Boeing 737 fleet in a bid to boost capacity, but will introduce smaller lavatories as a result.
The move comes as the company is expected to report an annual loss of $700 million and attempts to increase the number of quick turnarounds in the domestic market.
Qantas Domestic chief executive Lyell Strambi said there would be no change to the amount of seating space for each customer, according to a Fairfax report.
Qantas will introduce new slimline lavatories in economy class, boosting the number of seats from 168 to 174.
Rival airline Virgin Australia already boasts 176 seats on similar flights.
A multi-million dollar investment will also see new fully-flat seats installed in Qantas business class and an upgrade to in-flight entertainment systems due to be rolled out in 2015.