news.com.au
Fox's double coup
Geoff Easdown and Shaun Phillips
February 25, 2004
JETSTAR – the new Qantas discount airline – will fly from Lindsay Fox's Avalon airport.
In another coup yesterday, Mr Fox spent $10 million buying Phillip Island's internationally famous grand prix circuit.
He will build a 163-room, five-star hotel at the track.
The Avalon decision is a huge win for the trucking millionaire who walked away from a deal to buy the collapsed airline Ansett.
Jetstar, which is due to start flying in May, will use Boeing 717 jets and switch to Airbus A320 airliners as they become available.
The airline will start with up to three return flights a day to Sydney and Brisbane from Avalon.
The Avalon decision will give it major airport status in a snub for Tullamarine management.
By using Avalon, Jetstar will enjoy low overheads, stealing a march on rival discounter Virgin Blue.
Jetstar will avoid the high-cost landing and airport charges Virgin Blue pays for its first class facilityat Tullamarine.
Plans are under way to extend the existing terminal at Avalon, create car parks, entrance roads and special lighting.
Mr Fox acquired the former Government Aircraft Factory airport at Avalon, outside Geelong, seven years ago in a discounted 99-year lease from the Commonwealth.
Sources said the Fox organisation would provide baggage services for Jetstar's Avalon flights.
The Avalon deal will give Victoria two major airports, as well as Essendon and Moorabbin, compared with the overstretched services at Mascot in Sydney.
Less frequent services will fly from Tullamarine, the Herald Sun confirmed last night ahead of today's official announcement.
Jetstar's decision to snub Melbourne airport comes after months of acrimony between airport management and Qantas.
As a source who was involved at the deal from the beginning said last night: "Make no mistake, this was aimed at sticking it to Tullamarine management."
Melbourne airport chiefs have regularly taken the Australian flag carrier to task for downplaying Tullamarine in favour of Sydney.
The Avalon plan has been kept secret for months.
Sources told the Herald Sun last night that talks began midway through last year and only key Avalon staff were brought into the discussions between the Fox organisation and Qantas.
Qantas chief Geoff Dixon hinted last week that Qantas had a secret strategy to beat Virgin.
He revealed operating costs that would see Jetstar operating at better margins than its rival.
"Qantas is well placed to participate profitably in the industry's growth," he said.
The Phillip Island purchase extends Mr Fox's Linfox empire, which includes both Avalon and Essendon airports, a 4200-vehicle transport arm, extensive warehousing assets, Armaguard and 9000 employees.
Mr Fox also owns a $15 million classic car collection, which he exhibits at the Docklands.
There is speculation the collection could be moved to Phillip Island. Mr Fox has been negotiating to buy the 309ha circuit site for 18 months.
The initial asking price was as high as $20 million, which soon proved unrealistic.
A consortium has owned the Phillip Island circuit for 20 years.
Placetac Pty Ltd said it had agreed to sell the circuit to Linfox Property Group, "subject to the resolution of some formalities".
Placetac said the sale included the track, a visitor centre, farmland and the hotel site.
The Phillip Island circuit opened in 1956, the same year Mr Fox bought his first truck.
The Australian Motorcycle Grand Prix, held each October, is contracted at Phillip Island until 2006.
Grand Prix Corporation chairman Ron Walker said negotiations to extend the contract would start next year.
The State Government would then decide if it would continue to underwrite the event, which lost $6.9 million last financial year.
Bass Coast Shire chief executive Allan Bawden said a planning permit for a five-star, beachfront hotel at the circuit was current.
Mr Bawden said it would be highly unlikely the site could ever be carved up for housing.
Mr Fox last year reportedly bid $55 million for 90ha of former defence land at Point Nepean. He had hoped to turn it into a family compound.
Business Review Weekly in 2003 estimated Mr Fox's fortune at $331 million.
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