View Full Version : Sky too crowded for Ozair

10th Dec 2003, 23:54
Thurs "The Australian"

Sky too crowded for Ozair
By Steve Creedy
December 11, 2003

Melbourne Formula One identity Paul Stoddart is likely to delay his plans to enter the increasingly crowded low-cost airline market.

Speaking at the Australian Formula One launch in Sydney yesterday, Mr Stoddart said he might take a "raincheck" after the successful Virgin launch and plans by Qantas for low-cost offshoot JetStar.

The Minardi racing team owner had planned to start a Melbourne-based carrier called Ozair offering $199 one-way fares between Sydney, Melbourne, Brisbane and Adelaide.

But yesterday he said he was not keen to be caught in a price war between Virgin and JetStar.

The trepidation came as entrepreneur Richard Branson signalled he was considering launching another start-up in Asia and said Virgin Blue was well capitalised to take on JetStar.

"We are so well capitalised now that we could last twice as long as Qantas could last in a price war," Sir Richard told Bloomberg television.

"It would be unwise for them to attempt to damage us through a straightforward price war."

Sir Richard said he was talking to "one or two people" in Asia "about either working with them on a low-cost airline they have already set up, or setting up a low-cost airline".

But the British entrepreneur could find himself competing against a formidable coalition of aviation investors backed by Singapore Airlines.

Singapore Airlines announced late on Tuesday it would be a major partner in new Singapore-based low-cost airline called Tiger.

Tiger will be majority-owned by the airline and Singapore government investment vehicle Temasek Holdings, but will operate independently.

Other investors include the David Bonderman-Bill Franke aviation partnership Indigo Partners, and the family investment vehicle of Ryanair founder Tony Ryan, Irelandia Investments.

Mr Bonderman and Mr Franke, who invest in air transport in the US and Europe, were named as backers of the failed Tesna airline - intended to resurrect Ansett - but faded from the scene before the project's collapse.

The airline has no immediate plans to fly to Australia. It will use a "substantial fleet" of narrow-body aircraft with a range of about four hours from Singapore - within striking distance of Darwin.

It has engaged former Ryanair operations director Charlie Clinton to establish a base in Singapore and set up outstations in South-East Asia.

Singapore Airlines chief executive Chew Shoon Seng said his airline recognised the potential for low-cost travel.

"As (Singapore Airlines) itself is a premium full-service airline, it does not have experience with the low-cost business carrier model," he said.

"We are therefore pleased to invest in this new airline with partners who have the right credentials and relevant track record of success."