Jetstar make their profit from muffins.
Jetstar makes more money from muffins than tickets | News.com.au
JETSTAR chief Bruce Buchanan has revealed the budget carrier is making more from in-flight service than ticket sales.
He told BusinessDaily last night that the profit from sales of ancillary items - such as cups of coffee, muffins, baggage and special seat charges - was about $24 a passenger. The revelation comes as the airline's pilots warn that new contracts being forced on pilots pose a threat to passenger safety.
Mr Buchanan said ancillary revenues had increased from $2-$3 per ticket to the mid-$20s in the space of a few years and were growing "very fast''. This is the second-best result in the world when benchmarked against other carriers.
This money goes straight to the bottom line.
"One way to look at it is that if we didn't have the ancillary revenue we wouldn't be making any money. We would be losing money," Mr Buchanan said, in a likely reference to the hurt caused by the rocketing price of jet fuel.
Jetstar passengers are charged $4 for a muffin or a small container of Pringles, and $3 for a small bag of M&M chocolates.
A can of Coke costs $3 in-flight, but costs an average of $1.20 in supermarkets in Sydney and Melbourne. Coffee will set you back around $3 - below the national average of $3.20 - and a hot chocolate $4.
Meanwhile the cost of a window seat in the exit row can cost up to $60, while in-flight entertainment can cost $15 and extras such as blankets and pillows $7.
In other developments yesterday Jetstar parent Qantas rolled out its biggest gun - the 7.5 million member Frequent Flyer program - opening a new front in its war with arch rival Virgin Australia.
The Qantas loyalty program has been revamped to give Jetstar passengers the ability to earn and burn points, a move designed to appeal to the budget-conscious suits market.
Qantas chief Alan Joyce said the changes will give the airline a competitive edge on other carriers.
Under the changes Jetstar's fare structure will change.
StarClass - the carrier's equivalent of business - will be replaced with a full business product, a move that industry observers say is clearly aimed at Virgin Australia's attempt to lure small and medium businesses.
Safety concerns
Meanwhile Jetstar has received hundreds of emails from its pilots warning that it is placing the lives of passengers and crew at risk in it's move to force recruits on to contracts outside the enterprise bargaining agreement, the Sydney Morning Herald reported.
Captain Michael Danahar, a senior A320 captain with Jetstar, said the new contracts offer less pay and worse working conditions for new pilots, which will compromise the airline's safety standards.
'On a daily basis, my crew and I are constantly blocking errors and threats to the safety of our aircraft, staff and passengers,'' he said in an email to Jetstar.
''We need skilled crew on the flight deck with ample experience to do this rather than pilots with little experience.''
Another email by Captain James Matthews said that the move could lead to mid-air distractions.
''I am worried that this will start to have safety impacts on the operation as this issue is all that people are talking about and everyone is so angry, and this leads to a huge distraction in the flight deck.''