Is Jetstar handing the market to DJ?

[Eastwest Loco]

Interesting times good people.

Jetstar has leapt onto the scene with exactly the same approach as Impulse. Agents out of the loop without adding "fee for service" was the way Impulse tried to infiltrate the market. Didn't work then. Why should it work now?

If Virgin spends a mozza, gets a bucketload of extra bandwidth and server ports, they are about to hit the jackpot.

Tens of thousands of Travel professionals Australia Wide are already offering the DJ services at 7% commission over the "add your fee" Jetstar services.

The distressing thing is the loss of "full service" to a heap of ports. LST HBA OOL and the list goes on deprives punters of full service aeroplanes on the vast majority of services, and this will no doubt go to 100% with dislodgement of staff, redundancies and implantation of contract labour in the medium term thanks to 'Da Wally" and his axemen.

One more step down the gurgler - IF it works.

Despite server problems today with both discount carriers, all queries from punters that we could get online to handle wound up on DJ for the cheapies.

They got the seat, we get the commission (miniscule as it may be on a $29.00 fare) and retain client loyalty.

Someone needs to tell da Wally and his mates that you cannot import the Euro or Southwest blueprint into this market, and we will NOT do an airline's dirty work in pushing the fee for service model.

Advertise your butts off - make all the razzamatazz you can Jetstar - there are tens of thousands of us out here selling DJ like there was no tomorrow - and good luck - youse is gunna need it!!

For heavens sake - if the rat generates a 300+ million half year profit, then it aint broke!!

Why try to fix it.

From the point of view of my little Agency, the ripples will be few due to it's high care corporate nature, so I feel I can wade in on the basis of years loving Airlines I worked for and their culture. I do despair at what the industry is becoming and what is happening to the good people within the airlines.

When the 100,000 seats are sold, and the regular fares are on sale, then it will be very interesting to see how things go.

Here endeth the sermon - after Jetstar sold 30,000 seats today and DJ sold 60,000. Well there you go!!

Maybe they should have named the airline Impulse Mk II.

Best regards all

EWL

Ron

[tobzalp]

Mrs Plazbot works for a travel company. She tells very similar stories. When Virgin first started up they paid no comission. The got very little in the way of business from that comapny. They saw the light and started to pay 7% (?) while Qantas still put up 10%(?). Anyway Jetstar starts up with 0% commission yesterday and a web site that can't be accessed due traffic. The rumour I hear is that their company is selling 'other' airlines flights at whatever they can find as the cheapest Jetstar and topping up the price to teach them a quick little lesson on how zero commission gets you zero sales.

[Eastwest Loco]

Yep.

If there was ever a slot for DJ to step up a notch from restricted service to full Y service over some routes, here it is in trumps.

It also leaves a gaping hole for a full service airline to gain a major foothold over leisure routes at sensible pricing.

I wonder if the Lion's wait has ended and he is stretching and yawning? Please be stretching - pretty please????

The good news locally is that Qantaslink DPO and BWT remain their old selves, with full oncarriage baggage handling onto International and thru check.

LST HBA and OOL are a total joke. Quote an International fare ex one of those ports and it is - Ummmm - wel that is MEL to MEL - we will have to sort out the domestics when you book - and - well - changing overseas you will have to contact SQ and then try and get a seat to get back to Cooly from Sydney afterwards.

The further we get into Jetscar, the more we realise what damage some marketing wallies have caused to Australian aviation infrastructure. It even surpasses the choice of Amadeus as a GDS before talking to the Ops dudes who were out of country as a whole when it was done.

In 1978 we could through check a bag from Wynyard to London and on to Oslo or wherever. Now - get it yourself in Melbourne and good luck. Maybe Jetscar will even reintoduce Lockheed Electras on trunk routes. Actually if I could get a guernsey in the rear lounge I would even try that.

The agents of Australia are voting with their feet, and throwing their hats collectively in the DJ ring, along with QF mainline. Fright Centre with their robot know knowledge uni fodder will no doubt sell what ever they are told to, hiding the same airfare with inflated taxes and change fees over that of the airline,but that is life. Whenyou get herpes you are stuck with it.

This will have an effect, rest assured.

Booking Jetscar is incarriage to an international is a complete joke and a waste of time and effort and for no return without adding a fee that I will not add.

DJ??? You haven't lost Boeing's number have you??

best all.

No wonder I am bloody tired.

EWL

Ron

[Wirraway]

EWL
Here's an article that is along the lines you suggested:

ValuAir to model itself after America's JetBlue
It wants to be somewhere between budget and premium
By VEN SREENIVASAN

(SINGAPORE) ValuAir will be modelled after US discount airline JetBlue, and not the budget carrier model made famous by Europe's Ryanair.

Mr Lim: ValuAir's tickets will be 40 to 50 per cent cheaper than those of mainline network carriers
Speaking to the media after inking a deal to lease two new 162-seat A320 aircraft with Singapore Aircraft Leasing Enterprise (SALE), ValuAir chairman Lim Chin Beng said that Singapore's first low-cost carrier will position itself - both in terms of service and pricing - between regional full service network carriers and the budget carriers.

'We studied whether the European budget model can be replicated in Asia,' he said. 'In Europe, LCCs serve short-haul domestic routes of about one to two hours. But in Asia, the international flights can be between three and five hours. In Europe, you can compete on price. But in Asia, price is not everything. More legroom, inter-lining capabilities, seat allocation and longer turnaround can sell.'

Mr Lim said ValuAir's tickets will be 40 to 50 per cent cheaper than those of mainline network carriers and will be pegged at the average fares on budget carriers.

'Our fare structure will be very competitive compared with the Ryanair-type budget carriers. And it will be completely transparent, with no range.'

Tickets will be sold via the Internet and through agents.

Besides having wider 32-inch leather seats (compared with budget carriers' 29-inch seats), ValuAir will also serve passengers flying to its planned destinations of Bangkok, Jakarta and Hong Kong light refreshments.

The company is waiting to get its Air Operator's Certificate (AOC).

Mr Lim said ValuAir, with breakeven load factor of about 60 per cent, will not need a low-cost terminal at Changi Airport.

'We want passengers to have aerobridges, and our turnaround time will be an hour as we intend Changi to be our hub for interline transfers,' he said.

'We also envisage carrying cargo, which could increase our revenue by 8 to 10 per cent.'

Mr Lim's main partners in the venture are his son, Arthur Lim, the director of customer service consultants Resource Planning Development Pte Ltd; Natasha Fong, former vice-president of EDB Investments; and Jimmy Lau, the former president of Reed Exhibition Singapore and ex-managing director of Asian Aerospace Pte Ltd.

Each of them own just under 12 per cent of the company.

The major shareholders include Asiatravel.com, Blu Inc Group, Khattar Holdings and Wulthelam Holdings.

To-date, ValuAir has raised some $33 million in capital, and could raise more via private fund-raising in future.

It has recruited 80 staff, including 42 cabin crew and 18 pilots (mostly from the now-defunct Ansett Australia airlines).

Mr Lim acknowledged rumours that Singapore Airlines group had applied for all available traffic rights to Hong Kong and Jakarta ahead of ValuAir's launch.

'But I hope it will not be all given out,' he quipped. 'I hope some will be reserved.'

He added that unlike SilkAir, which flies to 'exotic destinations', ValuAir would concentrate on key regional cities.

The company plans to lease two more A320 aircraft after a year, thus enabling it to expand its routes to new destinations like Perth, southern China and even India.

SALE boss Robert Martin pointed out that ValuAir was his company's first local customer. Sale, which had ordered 51 planes from Airbus, has taken delivery of 31 aircraft so far. And ValuAir's planes will arrive next month, in time to take to the skies by May.

Hot on ValuAir's tail is likely to be budget carriers Singapore AirAsia (which applied for its AOC this month) and SIA's budget associate, Tiger Airways.

===========================================
Fri "Straits Times"

Tiger's new CEO has no aviation experience
Patrick Gan's impressive experience is in pharmaceuticals; analysts say having an 'outsider' head the carrier is a good move
By Goh Chin Lian
27 feb 2004

TIGER Airways, backed by pedigree aviation partners Singapore Airlines and Ryanair's founder, has chosen as chief executive a man with no aviation experience and who's never flown budget.

'My wife thinks I'm crazy,' said Mr Patrick Gan, 47, who has spent the past 18 years in management, marketing and sales positions in pharmaceutical companies. He admits it had got 'monotonous'.

Introduced at a press conference on the sidelines of the Asian Aerospace show yesterday, he said: 'I was looking for a thrill. When the Tiger ad came up, it was a rare chance I could not just let go.'

When he was interviewed for the job, he was asked what he would bring to Tiger Airways since he had no aviation background. He said he replied: 'I have built businesses all my working life, turned companies around and talked to governments. My financing and marketing skills will stand me in good stead.'

His extensive CV lists premium names in pharmaceuticals, topped by Novartis, where he was area director for the Asia-Pacific, overseeing eight countries.

Before that, he headed Glaxo Wellcome in China, and Taiwan, and worked with Roche. And yes, he's Singaporean, and a National University of Singapore graduate.

His experience, 'analytical abilities, work ethic and integrity' got him the job, said Mr William Franke, managing partner and co-founder of Tiger's United States shareholder, Indigo Partners, and a former chief of America West Airlines.

'He comes with no airline industry baggage, so to speak, so we welcome his fresh perspective,' said Mr Franke, who was introduced yesterday as Tiger's chairman.

Mr Gan admits the steep learning curve does give him some anxiety but the 'pedigree shareholders' are a source of comfort.

He says he plans to apply for the air operator certificate within three weeks.

Since he was hired a month ago, he has been interviewing people for key posts. Tiger is to have 100 staff, including 35 pilots and 40 cabin crew.

It may acquire five or six aircraft in its first year, and a deal should be announced within a month.

He will lead negotiations with airports within a four-hour radius of Singapore.

Tiger Airways' most obvious competition will be Malaysia's AirAsia, and then 'some frills' Valuair.

Mr Gan said he aims to keep costs down and make Tiger 'the gold standard' for the region's budget airlines, with the lowest possible fares.

Like AirAsia, and unlike Valuair, Tiger will be no-frills and have multiple fare tiers.

Comparing all three business models, analysts interviewed yesterday questioned Valuair's 'neither here nor there' model.

'SIA can never go after AirAsia, but it can go after Valuair. It's easier for SIA to retaliate,' said one analyst.

DBS Vickers associate director Chris Sanda expects a Tiger-AirAsia price war. He said: 'There can only be one low-cost carrier. They'll bite and claw at each other.'

He thinks Tiger's choice of an outsider as CEO is a good move. 'The board can take care of strategy and the chief operating officer, the running of the planes. The CEO has to be a true manager and a good motivator.'

Budget airlines pay less than big carriers and thrive on creating a fun environment for employees, who must do many tasks to keep costs low.

He said: 'You need people with a strong personality to drive that. People with background in the industry don't do well.'

If Mr Gan's choice yesterday of proper dark suit and gold tie - tiger colours - seemed more business class than budget carrier, he didn't care.

He said: 'They are not my benchmark. My most important task is not to be an entertainer in front of you, but to ensure that Tiger flies.'

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

[Eastwest Loco]

Thanks Wiraway

Very interesting reading and a good non Euro insight into the Asia Pacific market seems to have been taken on by Mr Lim Chin Beng and his people.

The Eeenie Weenie model still stands as a shining example that Greaseball had to kill.

Decent seat pitch, good aeroplanes, great people and a little bit extra in service. It didn't cost much but made people happy. that was of course the F28 era, with the F100s inbound.

Even our tiny (by comparison) Asian neighbours do not seem to like the humiliation of being stuffed into a seat and ignored for the duration of the flight as brain dead Pommy soccer fans on their way back from trashing Barcelona seem to accept.

It is nice to see that there is a tiny smidgin of intelligence still in the system. May it flourish.

Best all.

EWL

[Aladdin]

Virgin Blue To Keep The Air Fair….Again

"You Should Get What You Paid For & Not A Qantas 'Lite' Product"
Virgin Blue today announced it will continue championing the cause for the Australian travelling public by honouring fares for passengers who were previously booked on Qantas but now find themselves travelling on Jetstar. The airline has said that it will guarantee the same fare paid to Qantas if a passenger chooses to cancel their original booking on Qantas and contacts Virgin Blue with details of their trip. The passenger is responsible for obtaining a refund from Qantas and once the fare paid is verified, Virgin Blue will (subject to seat availability) book the passenger a fare at the same level that they had originally paid on Qantas.

Virgin Blue Head of Commercial Tim Jordan said, “We’ve always been about keeping the air fair and we don’t believe that it’s fair for travellers to have purchased a Qantas flight with more seat pitch, seat allocation, baggage connections and other expectations only to find out that they have been transferred to a Qantas ‘Lite’ type product without all of these offerings.”

He continued, “Our experience in the Australian domestic market over the past 3 ½ years tells us that people want low fares but they also want, and deserve, a high quality product. Passengers should get what they paid for and, as such, we would encourage travellers who booked on Qantas to look closely at the alternative they are now being asked to accept.”

Virgin Blue, offers a much more generous and traditional seat pitch which is on average 2”-3” more than the new competitors seat pitch. In addition, Australia’s established low fare leader also offers onboard seat allocations and through passenger and baggage check for connecting flights – both of these products won’t be offered by Qantas’ new no frills offshoot.

“It’s incredible to think that connecting passengers who booked on Qantas are probably going to have to collect their bags and stand in line again to check-in with Jetstar or Qantas for both their outbound and inbound trips. On top of that, the same passengers will have to encounter less onboard space and a footie like ‘scrum’ boarding process. I’m pretty sure that wasn’t explained when people bought their seats from Qantas over the past weeks & months.”

Tim Jordan concluded, “We are well established in the region as an award winning low cost airline and while we wish Jetstar the best of luck, we think that the Australian public have come to expect not only a low fare but a product that is of high quality. Ultimately the Australian travelling public will decide, but at Virgin Blue we like to think that a high quality, ontime, low cost product that gets you to where you really want to go is what is important.”

The offer is available from today until the 15th March 2004 and will require the passenger to validate to Virgin Blue the fare originally paid to Qantas. Virgin Blue will then (subject to seat availability) endeavour to transfer the passenger to the same itinerary either on the same day or on a day either side of their original booking. This offer will only apply to Qantas bookings made prior to the 25th February 2004 on routes that Jetstar will be operating for travel dates on or after the 25th May 2004.

More information on this offer can be found here or via the Guest Contact Centre on 13 6789.


Thought you might be interested!! :)