Wed "Melbourne Age"
Fox trot: Lindsay Fox has struck a deal with Qantas, allowing the use of his Avalon airport as a base for domestic Jetstar flights. The deal comes hot on the heels of the trucking and property tycoon's purchase of Phillip Island motorcycle track.
Photo: Andrew De La Rue
Budget airline to fly from Avalon
By Chris Evans, Stephen Dabkowski
February 25, 2004
Melbourne is to get a second domestic airport with the new Qantas subsidiary, Jetstar, to launch no-frills passenger services out of Avalon.
In a surprise move, Qantas has struck a deal with Avalon's owner, trucking and property tycoon Lindsay Fox, to use the airport as a base for domestic Jetstar flights.
The plan will be revealed today when Qantas unveils the route network and fare structure for Jetstar, the new Melbourne-based carrier it will use to take on Sir Richard Branson's Virgin Blue in the no-frills passenger market.
Travel industry sources last night told The Age that Jetstar would fly into and out of Avalon on the busy Melbourne-Sydney and Melbourne-Brisbane trunk routes. Other Jetstar flights will operate out of Tullamarine.
It is believed that Qantas, in its bid to achieve a low-cost structure to rival Virgin Blue, was attracted to Avalon, near Geelong, by the prospect of lower take-off and landing fees for Jetstar than it would face at Melbourne Airport.
And while Avalon is further from the city than Tullamarine, passengers will be advantaged by toll-free road access on the Princes Freeway and, it is believed, free parking.
The deal will make Melbourne the first city in Australia to have more than one major domestic airport.
A spokeswoman for Melbourne Airport said last night it was welcome development. "Competition is great for travel and tourism in Victoria, competition in both airlines and in airports. So we welcome them into operation," she said.
"They will be flying out of Melbourne (Airport) as well, I believe. We're still waiting on the announcement tomorrow, so I can't confirm that."
Until now, Avalon has operated principally as an air cargo port as well as a major airline maintenance facility, a pilot training centre and as the home of Melbourne's International Air Show.
By using Avalon for its no-frills operation, Qantas will be mimicking the strategy of successful European budget line RyanAir, which flies exclusively from secondary airports.
WHAT LINDSAY FOX OWNS
- Linfox trucking logistics business. Annual turnover $1.2 billion
- Avalon Airport
- Essendon Airport
- A multimillion-dollar classic car collection
- A 10 per cent stake in the Bank of Queensland
- A mansion in Irving Road, Toorak
- A mansion in Portsea as well as other property interests
While refusing to confirm the launch of Avalon as a second domestic passenger airport, the LinFox group and Premier Steve Bracks yesterday praised the facilities at the 1840-hectare site, which is 55 kilometres from Melbourne.
"It's a very exciting facility," LinFox spokesman David Fox told Channel Nine. "We're working on several projects at the present moment. But look, I don't think we're in a position to make any comment. Possibly exciting news, could be very exciting news."
Mr Bracks was also non-commital, saying nothing was settled. "But I do know that Avalon is a great location. It's a good airport. It's got great capacity," Mr Bracks said.
The launch of Jestar comes as Virgin Blue continues to make spectacular inroads in the domestic aviation market, announcing yesterday that its passenger numbers in January were 45 per cent higher than a year earlier.
Both airlines are battling to create the lowest-cost airline in Australia, with Qantas taking first-round points last week after unveiling commercially sensitive cost projections showing Jetstar could be run more cheaply than Virgin Blue.
Qantas announced last December that it would spend close to $1.6 billion on new aircraft for the low-cost carrier, which is set to take off in May.
The Jetstar deal is the latest in a series of moves by Mr Fox that have turned him into a major player in aviation. In partnership with British company Serco, Mr Fox bought Avalon from the Federal Government in 1997 for $11 million.
In 2001, Mr Fox bought Essendon Airport from the Government in partnership with Becton. More recently, Mr Fox and fellow Melbourne businessman Solomon Lew made a failed bid to take over and relaunch the collapsed Ansett Airlines.
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