What does this mean for Australian and Jet*'s OZ and Asia
The following is from todays Sydney Morning Herald. What does it all mean when reading between the lines? What is NOT being said by GD?
"New Jetstar division to be given its wings
By Scott Rochfort
December 5, 2005
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THE Qantas board is expected to approve the launch of Jetstar International on Wednesday and allow a $20 billion order for up to 100 long-haul aircraft.
By the end of next year Jetstar International is expected to start flying to destinations within 10 hours of Australia, which could include cities such as Seoul, Taipei, Ho Chi Minh City and several leisure spots in South-East Asia. Europe and the US could come later.
The new airline will form a major plank in Qantas's five-year plan to slash $3 billion from its cost base by mid-2007.
It is understood Qantas wants to run the offshoot with a cost base 40 per cent lower than its mainline operations. It will operate from all mainland state capitals.
It has been speculated that Qantas could repaint its four A330-200s for the launch of the airline and lease additional jets.
But Qantas's fleet order this week could provide a bigger clue as to Jetstar International's medium-term outlook and size.
In an interview on the ABC's Inside Business program, Qantas chief executive Geoff Dixon played down the notion of Jetstar International ever rivalling the Qantas mainline in size.
He said it would probably represent no more than 20 per cent of Qantas's international operations.
Qantas is deliberating whether to buy 300-seat Boeing 787s or Airbus 350s for the low-cost offshoot. It is expected the other tranche of the order - ultra long-range Boeing 777-200LRs or Airbus A340-500s - will go to Qantas's mainline operations.
Fuel prices could also be discussed at the board meeting.
While the price of jet fuel has fallen in recent weeks, Qantas is expected to face higher costs after January 1 because fuel hedging contracts are expiring. Qantas has hinted it could raise its fuel surcharge next year.
Another issue for discussion could be the fate of what has been dubbed Qantas's problem-child, Singapore-based Jetstar Asia.
Qantas has already sunk more than $50 million into the venture and its patience is said to be running out.
The 44.5 per cent Qantas-owned airline last week appointed its third chief executive, Neil Thompson, since it started flying nearly a year ago.
The airline has struggled to gain traffic rights into key routes into China and Indonesia.
It has also struggled to fully utilise its fleet of Airbus 320s, some of which it has had to sublease to a Turkish airline. High fuel prices have compounded its woes.
Amid criticism that Qantas's gung-ho approach in Asia has put some in the region offside, Mr Thompson's appointment is seen as positive. Fluent in mandarin, Mr Thompson could help Jetstar Asia to finally crack the Chinese market.
The signing of an air services pact between Singapore and China last week could also help.
This allows "airlines of both countries to operate passenger and all-cargo services between China and Singapore with no restrictions on capacity, routing or aircraft type", a Singapore Government statement said."