Wirraway
24th Feb 2004, 23:02
Wed "Sydney Morning Herald"
http://www.theage.com.au/ffxImage/urlpicture_id_1076175033172_2004/02/08/sn_jetstar.jpg
JetStar to undercut Virgin in battle for budget flyers
By Brad Norington
February 25, 2004
Qantas is expected to charge domestic passengers as much as 10 per cent less than Virgin Blue on some routes on its planned low-cost airline JetStar.
As Qantas prepares to unveil JetStar's fare structure and route network today, Virgin Blue has released figures confirming that its campaign to take market share away from Qantas is on track, with passenger numbers for last month increasing by almost 45 per cent over the same month the previous year.
Much of the increase - from 674,000 passengers carried last January to 975,000 this year - is attributed to growth in the leisure market, which is also benefiting Qantas.
Market analysts rated the new airline as a positive move for Australia's dominant carrier - and for bargain-hunting passengers. But in the short-term, they said, JetStar was not expected to have much impact on the market and had an impossible task to displace Virgin.
Jason Smith, an analyst with Citigroup Smith Barney, said JetStar would cater for the growing leisure market and Qantas would not allow the carrier to spoil the full-priced business market by flying at peak times.
"They'll fly Sydney-Brisbane-Melbourne, but it won't be on peak," he said. "If you want to fly peak, you fly Qantas."
With Qantas planning to use the former Impulse fleet of 14 Boeing 717s, JetStar's initial destinations are believed to include Sydney, Brisbane, Hobart, Adelaide, Cairns, Townsville and Hamilton Island.
This would mean flying routes used by Qantaslink, potentially saving Qantas money on unprofitable routes by turning them into low-cost services.
Mr Smith said he expected Qantas would price tickets for JetStar at or below Virgin Blue's.
Tickets such as Sydney-Hobart return for $99 or Sydney-Brisbane one-way for $59 would be common.
Jason Mabee of ABN Amro predicted Virgin Blue would continue eating into Qantas's market share beyond its present level of a third, easing up once JetStar gained new aircraft.
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http://www.theage.com.au/ffxImage/urlpicture_id_1076175033172_2004/02/08/sn_jetstar.jpg
JetStar to undercut Virgin in battle for budget flyers
By Brad Norington
February 25, 2004
Qantas is expected to charge domestic passengers as much as 10 per cent less than Virgin Blue on some routes on its planned low-cost airline JetStar.
As Qantas prepares to unveil JetStar's fare structure and route network today, Virgin Blue has released figures confirming that its campaign to take market share away from Qantas is on track, with passenger numbers for last month increasing by almost 45 per cent over the same month the previous year.
Much of the increase - from 674,000 passengers carried last January to 975,000 this year - is attributed to growth in the leisure market, which is also benefiting Qantas.
Market analysts rated the new airline as a positive move for Australia's dominant carrier - and for bargain-hunting passengers. But in the short-term, they said, JetStar was not expected to have much impact on the market and had an impossible task to displace Virgin.
Jason Smith, an analyst with Citigroup Smith Barney, said JetStar would cater for the growing leisure market and Qantas would not allow the carrier to spoil the full-priced business market by flying at peak times.
"They'll fly Sydney-Brisbane-Melbourne, but it won't be on peak," he said. "If you want to fly peak, you fly Qantas."
With Qantas planning to use the former Impulse fleet of 14 Boeing 717s, JetStar's initial destinations are believed to include Sydney, Brisbane, Hobart, Adelaide, Cairns, Townsville and Hamilton Island.
This would mean flying routes used by Qantaslink, potentially saving Qantas money on unprofitable routes by turning them into low-cost services.
Mr Smith said he expected Qantas would price tickets for JetStar at or below Virgin Blue's.
Tickets such as Sydney-Hobart return for $99 or Sydney-Brisbane one-way for $59 would be common.
Jason Mabee of ABN Amro predicted Virgin Blue would continue eating into Qantas's market share beyond its present level of a third, easing up once JetStar gained new aircraft.
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