3rd LCC planned for Australia

[Wirraway]

Fri "The Australian"

Cut-price airline on grid
By Leela de Kretser
November 07, 2003

FORMULA One heavyweight Paul Stoddart is planning a new Australian cut-price airline.

The Minardi F1 team boss, who wants it based in Melbourne, said: "This is still in its infancy, but we would be offering prices that I can say would make us very popular with passengers."

The Coburg boy turned multi-millionaire has told the Herald Sun of plans to operate a true discount air carrier, based at Tullamarine.

His Melbourne lawyer, Trevor King, has just registered the business names OzAir and Eurojet in Victoria.

"We are in the process of evaluating the business of a discount air carrier, yes," Mr Stoddart said from his UK home.

"I have sold my airline here, which doesn't wrap up for another couple of months. Obviously, Australia is a market I have an intensive interest in and I have been watching the industry since Virgin Blue came in.

"I feel they have moved away from the true ethos of a genuine discount market carrier, especially in an Australian market without Ansett."

Consumers would be the big winners of what could shape up to be another Australian airline war. Virgin Blue is to float next month and Qantas's discount airline starts in May.

Mr Stoddart said Qantas's announcement had delayed his new business.

"We had planned to go in against Virgin Blue, but I have a lot of respect for Qantas and want to wait and see what they do before launching," he said.

"The Qantas move has made us think."

In 2001, the motor racing enthusiast bought Minardi and has been largely responsible for Australian Mark Webber's career in Formula One.

Last year he made $316 million from his aviation business.

Mr Stoddart said Australians were yet to experience a European-style discount airline and would be the big winners out of his new company.

European airlines such as Eurojet and Ryanair are well known for offering fares way below market prices on the other side of the world.

At the height of the war between Compass, Qantas and Ansett, flights between Melbourne and Perth dropped to $150.

Mr King said the Eurojet name had been registered in Victoria for the long-term possibility of international discount travel.

He said the shorter term view was to concentrate on domestic flights under the OzAir banner.

Victoria could benefit from Mr Stoddart's return home as a replacement employer to Ansett.

"I think the appeal of Melbourne would obviously be strong," he said.

"We have a lot of respect for Steve Bracks and his people and I am sure Melbourne would be the most likely place we would set up.

"I also believe Tullamarine is a first-class airport, which at the moment is a very under-used facility with tremendous capacity."

Third airlines Compass and Compass II failed; Impulse was taken over by Qantas; and Ansett collapsed in 2001.

A government spokeswoman said Mr Stoddart had discussed the matter with the Premier.

"We're interested in what he is proposing because it's always good to have new opportunities, but we need to discuss details with him further," she said.

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[Beer Can Dreaming]

I think this airline is about a year too late.
Maybe this guy ought to buy a few Virgin Blue or Qantas shares instead.
What he didnt mention was that Compass MK1 actually was doing fares between MEL-ADL for $20 at the height of competition.
That wouldnt even cover the cost of fuel but I gladly paid the price!

[cunninglinguist]

Heard it all before, someone always thinks they can do it better than everyone else.
Hope it does better than Minardi.

[Wirraway]

DOW JONES
Friday November 7, 10:37 AM AEDT

Australia's Stoddart Likely Won't Challenge Qantas

MELBOURNE (Dow Jones)--Minardi Formula One boss Paul Stoddart said Friday he is considering a new Australian cut-price airline, but conceded it probably won't eventuate if Qantas Airways Ltd. proceeds with its own discount carrier.

Stoddart, an Australian who also owns a fleet of aircraft based in Europe including Boeing 747s, said he will make a decision on whether to proceed with his planned venture, to be based in Melbourne, early in 2004.

"It's an opportunity, but when we looked at this in a bit of detail it was before Qantas announced that they were looking at the same thing," he told Australian Broadcasting Corp. radio.

"I've got a lot of respect for Qantas, so we will have a very hard look at it before we go too much further," he said.

"People have crashed and burned. I'm not going to be foolish enough to go head-to-head with Qantas, so we'll see what happens."

Qantas, Australia's biggest carrier, recently confirmed it will launch a low-cost domestic airline in May 2004 as it steps up efforts to tackle inroads made by Virgin Blue, half-owned by Patrick Corp.

Qantas chief executive Geoff Dixon said the national airline is in talks with Boeing Co. Airbus and aircraft lessors about buying an unspecified number of 737-800 or A320 planes for the new division.

Dixon said the low-cost operation will expand to a fleet of 23 aircraft by mid-2005.

Virgin Blue, which has grown its domestic market share to around 30% since beginning operations in August 2000, will have 42 planes when the Qantas rival is launched.

Stoddart, who leases his fleet of aircraft across Europe, said it would be at least six months before his proposed airline could start operations.

"We've got the aircraft available and we've got the ability to make it happen reasonably quickly in airline terms, so it would probably be six months," he told ABC radio.

Even so, Stoddart said: "We have to make sure that the need and the demand that we felt is there is really there."

The Herald Sun newspaper reported Friday that Stoddart's Melbourne lawyer has just registered the business names OzAir and Eurojet in Victoria state, the Herald Sun says.

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[Jet_A_Knight]

How do you make a bit of money out of aviation.........................

[AIRWAY]

Hi

I know Australia is a vast Country, but is there a market for all these airlines? :rolleyes:

[Don Esson]

No, there is insufficient market for more than one LCC and one full service carrier. The population is too small, distances too great and population centres too far apart to successfully replicate what we see in Europe and North America. In a country like OZ, why everyone thinks that air travel should be cheap as chips while punters happily part with top dollar for just about everything else beggars belief. However, there are still quite a few egos out there who like the thrill of the chase and the attendant publicity who encourage the free market/economic rationalist thinking.

Anyone for a cold shower?

[Wirraway]

Sat "Melbourne Age"

Bracks backs new airline
By Andrew Heasley
Transport Reporter
November 8, 2003

Formula one Minardi team boss Paul Stoddart and the Victorian Government have discussed his plan to start a cut-price domestic airline, Premier Steve Bracks said yesterday.

"We haven't got any developed plans at this stage, but we welcome a low-budget airline based in Victoria, as we would welcome any competition to occur in the airline industry," he said.

Mr Stoddart, speaking from London yesterday, said Ansett's demise had opened the way for another airline. "There is a need for a third airline, and it needs to be a low-cost one," he said.

Mr Stoddart's said "catchy" names such as OzAir and Eurojet had been reserved in Victoria in preparation for a new carrier.

His plan involves running a fleet of six second-hand jets, 10 to 15 years old, seating about 160 people, initially on the lucrative east-coast routes, and to Adelaide.

He said it would cost about $50 million to start the airline, which would employ hundreds of people, and it could be in the air by mid next year. Tickets on each flight would be the same price, and there would be no booking restrictions.

Mr Stoddart wants to visit Melbourne and Mr Bracks early next month to work on his plans.

Mr Stoddart recently sold his profitable overseas airline, European Aviation Air Charter.

Mr Stoddart, formerly from Coburg, said he would prefer to be based in Melbourne, but the location would depend on which state offered the best deal.

Mr Stoddart's lawyer, Trevor King, said the proposed airline would be a "proper cut-price airline", and that Virgin Blue had moved from being a true discount airline, a claim described as "bollocks" by Virgin chief Sir Richard Branson.

"If he wants a challenge - we're always open for a challenge," he said. "We will never, ever be undercut."

Sir Richard said that Mr Stoddart's airline would have to get "an awful lot of things right" to survive as a third carrier in the Australian market.

Mr Stoddart said his plans had been tempered by Qantas's decision to start a cut-price domestic airline next May. "There's no way I want to go head-to-head with Qantas," Mr Stoddart said. "I've got too much respect for them."

Melbourne Airport Corporation spokesman Geoffrey Conaghan said yesterday that 10 gates in the southern domestic terminal were mothballed after Ansett collapsed, and these could be used by a new airline. There were also plenty of take-off and landing time slots.

Airport representatives had not yet talked to Mr Stoddart, he said.

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[Wirraway]

Sat "West Australian"

F1 boss eyes new cut-price airline
By Nick Miller and Geoffrey Thomas

TRAVELLERS could get two new discount airlines next year, as expatriate businessman Paul Stoddart revealed yesterday he was planning a new national carrier.

But the British-based Mr Stoddart, best known for owning the Minardi Formula One racing team, said he would wait and see how Qantas' new cut-price network affected the market before committing to the venture.

Mr Stoddart's new airline would be called OzAir, and offer fares below those of both Qantas and Virgin Blue.

However, his plans are on hold until after May, when Qantas plans to introduce a new discount airline aimed at holidaymakers.

Qantas plans to have up to 23 planes in service by 2005.

"I have a lot respect for Qantas, one of the better airlines in the world, and I am certainly not going to be foolish enough to go head-to-head with Qantas," Mr Stoddart told ABC Radio yesterday.

He estimated it would take six months to get OzAir up and running.

Mr Stoddart said Virgin Blue was not a genuine cut-price airline and there was room in the market for a cheaper alternative.

He said the plans were for a genuine national carrier rather than a "cherry picker" of the more lucrative routes.

Virgin chief Sir Richard Branson, who was in New Zealand yesterday, said it was "a load of bollocks" that Virgin was no longer a genuine discounter.

Virgin Blue spokesman David Huttner said the airline had sold more than 200,000 seats last weekend at fares as low as $39.

"If some guy thinks that's not a low fare then what can I say?" he said. "The world is full of millionaires who used to be billionaires until they got in the airline business."

Mr Huttner said Virgin would not be afraid to enter a price war with any newcomer.

"Virgin Blue will do what it takes to remain competitive," he said.

Mr Stoddart held talks with the Victorian Government about his plans three weeks ago, and is expected to return for more discussions next month.

The airline would probably be based in Melbourne, Mr Stoddart's home town.

Mr Stoddart is no newcomer to aviation, having founded European Aviation in 1989 and building it into one of the continent's most successful budget carriers. He is now trying to sell his share.

Businessman Lindsay Fox, who failed to relaunch Ansett in 2001, said there was room for a "second-tier" airline if it operated out of low-cost airports.

Virgin Blue has won 30 per cent of the market in three years.

Since deregulation started in Australia in late 1990, Compass I and Compass II, Ansett, and Flight-West have failed, while Impulse Airlines and Australian Airlines have been taken over by Qantas.

Qantas declined to comment on Mr Stoddart's plans yesterday.

© 2003 West Australian Newspapers Limited
All Rights Reserved.

============================================

[Sheep Guts]

It funny how they compare these new Ozzie LCCs to Compass and Flight West etc.
The major difference is the amount of Capitol one needs to start with. Virgin may not have started with much ( 11 million AUD I heard ) tangible captitol as they say, but they had the big back pocket to start with in Sir Rich.
Jetblue aswell in the US is another Capitol Raising sucess story, they raised 130 million in 1999 with no plan, gauruntee, Plane selection, or even BASE selection. It was all raised on the CEO David Neeleman reputation, and during the mini economic boom in 1999 just before it slowed and 9/11 came. So To do such a capitol raising now would be very hard indeed. US speaking Im saying.

Its all timing. Bit like putting a bet on a horse. A little more calculated though.

Paul Stoddard will need some good Capitol, to start now probably more than even Virgin Blue needed as the OzMarket space has reduced considerably for another LCC to enter.

Good Luck to Him.
The thing is, we see them come and go, Guys and Girls get jobs then are paid off or NOT ( like Ansett).

Market Stability means Job stability.


Sheep

Sheep

[Icarus2001]

Minardi Formula One boss Paul Stoddart said Friday he is considering a new Australian cut-price airline, but conceded it probably won't eventuate if Qantas Airways Ltd. proceeds with its own discount carrier.

Qantas, Australia's biggest carrier, recently confirmed it will launch a low-cost domestic airline in May 2004

But the British-based Mr Stoddart, best known for owning the Minardi Formula One racing team, said he would wait and see how Qantas' new cut-price network affected the market before committing to the venture.

Sounds like either a fishing trip or someone after some media attention. Why on earth would you announce to your competitors your plans at this early stage?

[Aussierotor]

Think i will stick to Qantas.
Book in advance and there cheap enough for me.I only see a +$20 or- $20 difference.
Maybe AD to MEL or MEL to SYD may be ok but crossing the Nullabour i like watching the movie and having a nibble on something.
As for those super cheap fares ,ive never found one available when i want one.Its good advertising but try and get one on the dates you want to fly.
Im not a full bottle on it,but surely the cheapies are on days and times the records show the planes are no where near full capacity,and a few $ are better than nothing.
Low cost or not ,in the end you still have the operating costs.OK ,lower wages ,no gimmicks etc reduce the cost by a certain percentage,but i doubt its enough to drop the fares to a bargain price.Maybe 2 extra rows of cheap tickets.

Think ill stick to the dog i know

[alangirvan]

'Mr Stoddart is no newcomer to aviation, having founded European Aviation in 1989 and building it into one of the continent's most successful budget carriers. He is now trying to sell his share.'

European Aviation is not a budget carrier in the sense of being a low cost scheduled airline like Easyjet or Ryan. It is a charter airline that buys very old planes. It bought two RAAF BAe 1-11s, it bought some old British Airways 1-11s and some Sabena 737-200s (all non hushkitted planes). It bought 5 old 747-200s from BA ( one of which will be visiting Sydney on 14 November)/

EAL has found that there are not many places in Europe that will accept Stage 2 aircraft. They have been using the 747s on flights to Orlando, Florida, though in other posts on pprune, some passenger have reported that they have very tatty interiors.

I think when a previous post called EAL one of the continent's most successful budget airlines, he may have been confusing them with EasyJet ( a great New Zealand success story)

[Chocks Away]

Must be something to do with these Formula One Dudes?...:}

Niki Lauda confirms low-fare plans
Dateline: Thursday November 06, 2003

Niki Lauda confirmed yesterday to media in Vienna widely reported plans that he intends to acquire, for an undisclosed sum, a majority stake in the Austrian subsidiary of insolvent German leisure carrier Aero Lloyd and launch a new low-cost carrier (ATWOnline, Nov. 4).

Significant details remain open. Lauda said, without elaboration, that it will require eur4 million ($4.6 million) to re-launch Aero Lloyd Austria as an independent airline. Where that money will come from was not clear. The carrier comprises four aircraft registered in Austria and therefore is not affected directly by the German insolvency proceedings.
Lauda said he will acquire the 51% stake held by Austrian film and TV producer Michael Wolkenstein, "plus a bit more," after the deal got the green light Tuesday night from the court-appointed German insolvency administrator.

Defunct Aero Lloyd apparently will retain a 49% stake in the Austrian subsidiary carrier under this scenario. Financial and specific share details were not revealed immediately, but Austrian media speculate Lauda ultimately will swallow 75% of the shares by the time the transaction is concluded.

Lauda, 53, said he plans to launch operations early next year from Vienna with two aircraft but could double the fleet to four by summer. Exactly what kind of airline he envisages remained unclear, except he said it will not be the standard frills-free operation at rock-bottom ticket prices but "a quality discount carrier."

The three-time Formula One Grand Prix champion founded namesake Lauda Air in 1979 and became a licensed airline pilot qualified to operate passenger aircraft up to the 777--which he frequently did. He was forced to sell out to Austrian Airlines amid financial turbulence three years ago. A two-year no-compete clause in the contract between AUA and Lauda has expired, opening the way to a comeback. He is still on the board of charter airline Lauda Air Italia after having divested his 60% stake earlier this year.--LH




:ok:

[Seco]

There is room for a 3rd airline in australia...wait and see

[Chocks Away]

Yep,

Alliance seem to be doing well increasing the Townsvilles' slowly... Mackhair expanding into NSW with AeroDuck and Horizon acquisition... SkyWest into the jet ops...

Best of luck to them and any others, in maintaining/increasing services in what is a dynamic service industry. :ok:

[Beer Can Dreaming]

Let's face commercial realities here guys.
We currently have QF and VB.
Some time back we had QF/AN/VB and Impulse.
Impulse couldnt make a real go of it and Gerry sold out.......thats history now.
At the time if Ansett didnt collapse then VB would be a fraction of their size and possibly struggling.They've done well and good on them.

Now we have QF/VB and the new Qantas low cost carrier - thats a certainty unlike all the other speculators and wannabees.
I would say anyone setting up yet another airline in addition to the above needs their head read.

I remember in the old Ansett days some people writing on PPrUne that Oz could support up to five domestic carriers.
Their financial prowess and speculation has been proven to be woefully inadequate.

What this country needs is say 3 carriers that gives the punters what they want.
A a bit of competition coupled with longevity and stability,not some fly-by-night outfit that may start up then go broke a year or two down the track and destroy peoples lives.

Compass MkI/ Compass MkII, East West (swallowed up by AN), Ansett, Flightwest and Impulse (swallowed up by QF).
How many more people must learn the hard way.

[pullock]

I like how they mention that the name "Eurojet" is a catchy name.

Marketing an airline to Australians called "Eurojet" demonstrates a fundamental misunderstanding of the Australian market.

And to think that this would be the least of their problems:(

[apacau]

I think a market for a 3rd airline exists. BUT they shouldn't have this dream of being a national operator. Stick with a couple of planes on SYD-MEL and SYD-BNE and you'll be fine. Markets of that size around the world often have 4-5 carriers operating.

[Wirraway]

Fri "The Australian"

It's tough, Stoddart warned
By Steve Creedy
November 14, 2003

Formula One Minardi team boss Paul Stoddart faces a steep uphill battle if he wants to start a national low-cost carrier, airline executives have warned.

Mr Stoddart's lawyer, Trevor King, revealed last week that the businessman had recently registered the names OzAir and Eurojet in Victoria.

Mr King said the airline plans were in their infancy but it was envisaged the airline would be a national service.

He claimed the opportunity had emerged for a new airline because Virgin Blue had moved from a true discount model.

Mr Stoddart, who recently sold a charter operation he started in Europe, has discussed his proposal with the Victorian Government but has not submitted firm plans and has yet to approach the Civil Aviation Safety Authority.

Virgin Blue this week rejected Mr King's claims and warned the Stoddart airline would face tough competition.

Virgin chief executive Brett Godfrey said there were many people who had not made it from the blackboard to the tarmac.

"If they're as committed and as focused as they said they are - and they said they had been looking at this for many, many years - I quite frankly think they've made their first mistake," Mr Godfrey said.

"And that is, if they were going to do it, the ideal opportunity was ... when Tesna (the proposed replacement for Ansett) fell over.

"It was right for someone in there, which is why we moved very, very quickly, in my view, to close the gap."

Mr Godfrey also pointed to the millions of dollars Tesna calculated it would lose in its first year of operations but stopped short of saying there would be no third low-cost carrier.

There were still unserviced niche markets, he said.

"I'm convinced we will see a third entrant at some stage but I'm not sure we're going to see a substantial third entrant."

Qantas, which plans to launch its own low-cost airline in May, also cast doubt on the Stoddart plan.

Qantas chief executive Geoff Dixon said he could not comment on whether or not the proposed carrier would get off the ground.

But he agreed it would be difficult for another low-cost start-up to enter the market against Virgin and the Qantas low-cost entrant.

"I do think it will be a very crowded market," Mr Dixon said.

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[mjbow2]

.....Start with a lot!