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Jetstar to launch Europe service
By Amy Kazmin in Bangkok
Published: October 22 2007 16:42 | Last updated: October 22 2007 16:42
Jetstar, the low-cost subsidiary of Qantas, plans to launch long-haul routes into Europe in early 2009.
The carrier is also in the process of choosing a south-east Asian airport as its regional hub for the European traffic, a senior Jetstar executive said on Monday.
In the latest sign of increasing competition in the low-cost, long-haul aviation market, Bruce Buchanan, Jetstar group general manager, said the carrier was considering Bangkok, Ho Chi Minh City, Kuala Lumpur and Singapore as potential jump-off points for its Europe-bound flights, and will decide by February or March.
The carrier is now studying passenger traffic flows, while awaiting bids from the regional airports. The winning airport could gain an additional 28 long-haul flights a week once all services are launched, although he said Jetstar could opt to launch its Europe-bound flights from several different south-east Asian intermed*iate airports.
“The key for us as a low-cost carrier is to look at the cost of operating,” said Mr Buchanan, during a visit to Bangkok.
In pushing to expand its regional low-cost service into the intercontinental market between Asia and Europe, Jetstar will compete with AirAsia X, a newly formed joint venture between the Malaysian-based budget carrier AirAsia and Sir Richard Branson’s Virgin Group.
AirAsia X, scheduled to launch its first long-haul service to Australia next month, hopes to start direct services to the UK by October 2008.
Jetstar, which is due to take delivery of 15 Boeing 787 Dreamliners in 2009, has yet to decide on its own European routes but is considering Athens, Rome, Paris, Munich and Amsterdam as potential destinations.
Mr Buchanan said Jetstar had been in discussion with Airports of Thailand, the listed Thai airport operator, about using either its one-year-old Suvarnabhumi Airport, or its older Don Muang Airport, as a hub.
While Thailand’s relative proximity to Europe – compared with the other possible hubs – is a plus, the cost of using either of Bangkok’s two airports is now about twice the cost of using Singapore or Kuala Lumpur, calculated on a per passenger basis.
Even low-cost carriers that have switched some of their flights back to Don Muang from Suvarnabhumi are still being charged the same high landing and passenger fees that apply at the new airport.
But, Mr Buchanan said: “If they can come up with a plan that may involve the old airport, that would be very interesting for us in terms of ‘can we get the cost structure to a level that would be competitive with those other intermediate points?’ ”
Jetstar currently operates flights three times a week between Bangkok and Melbourne, and thrice weekly flights between Sydney and Phuket.
Extract from The Financial Times Limited 2007