Dow Jones
CANBERRA, Australia (AP)--Australia's newest airline took off on its maiden flight Sunday from the tourist port of Cairns to Nagoya in Japan on what the carrier and local tourism industry hope will be a new aviation trail into Asia.
Australian Airlines, a subsidiary of Australia's flag carrier Qantas, has a simple mission: make money on tourist routes where its parent - and some of its competitors - couldn't turn a profit.
But the airline's launch coincides with a downturn in Australian travel to Asia following the Oct. 12 Bali bombings which killed 191 people - many of them Australians - and heightened terrorist alerts in some countries in the region.
The carrier initially will connect Cairns, on Australia's tropical northeast coast in Queensland state, with six Asian cities: Nagoya, Fukuoka and Osaka in Japan; Hong Kong, Singapore and the Taiwanese capital, Taipei.
Early in 2003, the carrier aims to open a second hub in a southern Australian city for service to Thailand and Malaysia. The city has yet to be announced. Plans also call for eventually expanding its fleet of Boeing 767-300s from four to 12.
The Queensland state government and resort and travel companies hope the airline will invigorate the local industry, which never fully recovered from a fall in tourist numbers after the Sept. 11 terror attacks on the United States.
"Today signifies a resurgence of strength in the tourism industry," Queensland state Tourism Minister Steve Bredhauer said at a ceremony Sunday to mark the first flight.
The airline will inject $275 million into the Queensland economy annually, create 300 jobs and bring 350,000 international visitors each year, Bredhauer said.
The carrier's chief executive Denis Adams told The Associated Press last month he will fulfill the airline's mission by focusing on the tourist market and cutting costs by up to 30 percent.
However, Adams says the airline isn't a no-frills carrier like EasyJet in Europe or Southwest in the U.S., which seek to attract budget travelers on mostly short-haul routes.
The airline describes itself as an "international leisure carrier."
Because it flies only so-called "leisure routes," which have few or no business travelers, the airline has stripped out the first and business class sections on its jets. That increases seating from 229 to 271.
Staff are employed under new labor agreements negotiated without unions.
Industry analysts say the airline's new concept has a reasonable chance of keeping it aloft in a competitive market.
"It's a bold new approach - hopefully that boldness will justify the risk," said Peter Harbison of the Center for Asia-Pacific Aviation.
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