JetStar on books with A320 fleet
Fri "The Australian"
JetStar on books with A320 fleet
By Steve Creedy
December 19, 2003
Qantas low-cost carrier JetStar is positioning itself for long-term growth, signing a contract this week to buy 20 Airbus A320s worth up to $US1 billion ($1.35 billion) with options to take 40 more.
The agreement comes as Qantas is also moving to boost its regional fleet with an order for six 50-seater Q300 Dash 8s to replace older 36-seaters.
The $100-million-plus Dash 8 order, with options to buy two additional Q300s, is the airline's biggest ever single investment in the regional turboprop fleet.
JetStar will eventually operate a fleet of 23 all-Airbus aircraft, including three leased planes.
It plans to launch in May using Impulse Airlines' fleet of 14 Boeing 717s, adding the first leased A320 in July and starting delivery of the purchased planes in October.
Executives say the 717s will be phased out over the next 12 to 18 months as the A320s arrive and JetStar heads towards its initial growth target of 23 aircraft in mid-2005.
The new aircraft will carry 177 passengers in an all-economy layout. The airline has opted for a shorter 30-inch seat pitch but says the cabin will be more spacious and seats 2.5cm to 3.75cm wider than in a Boeing 737.
"As you might expect, economics played a big role in our choice of the Airbus A320 family for JetStar," said Qantas chief executive Geoff Dixon.
"But we also liked the competitive edge and its modern design and more comfortable cabin will give us in the low-cost arena."
The A320s will be powered by International Aero Engines V2500 engines, the same as those used by Air New Zealand's A320s.
JetStar chief executive Alan Joyce said the operational benefits offered by the V2500 were an important factor in its selection.
But engineers are worried the new engine means maintenance work will go overseas.
"This is not the same engine that Ansett operated so there there is no current engine shop in Australia for it," said Australian Licensed Aircraft Engineers Association federal secretary David Kemp. "There's a concern about what that means about foreign overhauls for the engine."
The additions are part of a wider Qantas fleet strategy that sees the mainline domestic carrier flying Boeing 767s and 737s and Qantaslink using Dash 8s and BAe 146s, while international routes are flown by a mix of A330s, Boeing 747s and, from 2006, A380s.
Meanwhile, Qantas hit back yesterday at Virgin Blue's criticism that it was taking too long to publish monthly traffic figures.
The airline said it took an additional few weeks to publish the figures to make sure they were accurate and so it could provide additional yield trend information sought by investors and analysts.
Virgin, which has vowed to "own" the low-cost market, launched a fares sale with tickets as low as $39 one-way on some routes.
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Fri "Sydney Morning Herald"
JetStar orders first 20 Airbuses for '04
By Scott Rochfort
December 19, 2003
Qantas's cut-price offshoot, JetStar, confirmed its order to purchase 20 Airbus 320s yesterday and kept unions second-guessing over its growth intentions - and plans to cannibalise Qantas's existing operations - by taking options to buy another 40 of the aircraft.
After putting aside $100 million to set up JetStar, it is estimated Qantas will spend another $US1 billion ($1.35 billion) on the A320s.
JetStar is due to start operating next May with three leased A320s and Qantas's fleet of 14 ex-Impulse Boeing 717s.
The first of the purchased A320s is due for delivery in October next year. All 20 A320s are expected to be delivered by mid-2006.
It is understood the options for the 40 extra A320s do not have a fixed expiry date.
But aside from yesterday's fleet order announcement, Qantas still declined to give away any further clues on where JetStar will fly and which facilities it will use at Melbourne Airport.
ACTU senior industrial officer Richard Watts said: "The main issue is what routes [JetStar] flies and how often Qantas [mainline] flies to places like Tasmania in future."
JetStar is set to detail its route structure next month, but Qantas has already indicated the airline could fly on main-city trunk routes at non-peak times, bringing it into direct competition with Qantas mainline and Virgin Blue.
Amid criticisms from Virgin's Sir Richard Branson that JetStar's 30-inch seat pitch (distance between each seat) made it a "one-star" airline, JetStar's chief executive Alan Joyce said the budget offshoot's "1 to 1 inch wider seats and spacious cabin lends itself better to providing value that our customers will appreciate".
Qantas mainline and Virgin have seat pitches of 32 inches.
Meanwhile, Qantas's regional subsidiary, QantasLink, said it had placed a $100 million order for six 50-seat turbo-prop Dash 8 Q300 aircraft, with options to buy another two.
The new aircraft will replace QantasLink's ageing fleet of 36-seat Dash 8s.
"The new aircraft will operate in NSW, the ACT, Queensland, Victoria and Tasmania," QantasLink boss Narendra Kumar said in a statement.
"They will enable us to make more seats available at peak times on key routes - for example, between Sydney and Canberra, Coffs Harbour, Port Macquarie and Albury, on Melbourne-Canberra and Melbourne-Devonport services, and between Cairns and Townsville, and Cairns-Hamilton Island," Mr Kumar said.
Qantas shares were steady at $3.33.
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