Originally Posted by
PlasticFantastic
I'm not sure that's quite right. Qantas invested heavily in setting up Jetstar to 'pincer' Virgin Blue with an even lower cost product, leaving Qantas itself free to specialise as a full service carrier. JB's move to the current VA model was a response to the fact that
VB was caught in the middle, and not winning.
The alternative wouldn't have been to leave
VB as it was - it would have been to strip it back to a ULCC model, and JB's view at the time was that there wasn't space in Australia for two, full-size LCCs, and that they stood a better chance of taking corporate marketshare from Qantas.
That's not a defence of JB - I think he lost sight of the need for cost control - but I do think he was right that there wasn't space for multiple LCCs. SQ learnt that with Tiger (and then JB bought it...), and NZ seem to realise this - hence their complete disinterest in entering the domestic market (well, that and having been burnt by Ansett).
Sorry, but that's wrong. Jetstar was announced in 2003 and started operations in 2004 in May (25th to be exact). Ansett was LONG gone and Qantas had taken on some Ansett leases of 767s to get the capacity to cope with the absence of AN. DJ as they were then, also leased one or two ex AN 737s to take up the slack. Ansett exiting most definitely resulted in DJ's survival as it was rumoured to be weeks or a month or so away from pulling the pin (apparently RB has done this more than a few times with no regard for investors losses)... exit AN, ramp up DJ. Then for years DJ had no idea what it was once JQ started... could not decide whether it was low cost, premium or something in between. They should have gone downmarket, kept the 737s and cheerful image and they would have remained profitable. As it is they are too small to effectively compete with QF... even AN struggled with it's good but anaemic international network.