Wirraway
28th Mar 2004, 03:56
Fri "Australian Financial Review"
New airlines eager to fly Australian skies
A new international carrier is set to enter the Australian market by the end of this year, and is seeking to raise $US25 million ($34 million) from local investors.
leisurejet is aiming to fly high-yield niche routes from Sydney and Melbourne to destinations in Asia and southern Europe.
The budget operator is seeking funds from wealthy individuals and private equity firms, before a possible public float within two to three years.
The leisurejet start-up is also targeting budget travellers and those visiting family and friends.
It initially plans to run flights from Sydney and Melbourne to Greece and Italy via Kuala Lumpur .
According to one private investor who has seen its business plan, the airline aims to have revenue of $100 million in the first year, growing to $155 million within five years.
Sources familiar with leisurejet say the business plan was formulated two years ago but that it has been ``waiting for the appropriate conditions to launch''.
At this stage it plans to begin flights in the third quarter of this year, using Airbus A320s and A330s.
It is unclear what funding commitments it has received.
The recovery of the global aviation market and the relatively low barriers to entry in Australia have resulted in a host of new operators trying to enter the market.
Motor racing identity Paul Stoddart had planned to start his cut-price domestic airline, OzJet , in October but this has been delayed for 18 months due to problems with accessing secondary airports.
Another potential new entrant is BackpackersXpress , which hopes to run a low-cost service between Australia and Europe from the middle of this year.
As the name suggests, backpackers are its target market, and the airline's two chartered Boeing 747s will have a pub and live entertainment as well as two enormous VB logos on the engines.
The regional aviation industry has made plenty of headlines of late, and there has been speculation that either Qantas or Virgin Blue will take a stake in Malaysian budget carrier AirAsia.
The airline, run by Tony Fernandes, is preparing for a public float that could value the company as high as $1.3 billion .
The Asian Wall Street Journal has been reporting that Virgin could buy a stake in AirAsia in the next few weeks, but neither Qantas nor Virgin would comment on their plans regarding the airline.
Meanwhile, Air New Zealand announced on Wednesday that it was ramping up capacity on trans-Tasman routes by 10 per cent a year.
New Zealand's once tottering airline is taking an aggressive stance in the face of increased competition from its Australian rivals and airlines such as Emirates and Lan Chile.
The airfare war across the Tasman has been heating up since Virgin Blue announced its intention to fly the route using its Pacific Blue subsidiary.
In addition, airlines such as Emirates have gained the right to add the trans-Tasman route to their itineraries.
Air New Zealand subsidiary Freedom Air is also beefing up capacity on the trans-Tasman route. It announced yesterday that it was adding one more aircraft to its fleet, giving it 25 per cent more seats.
Air New Zealand head Ralph Norris said Freedom Air had the lowest cost base of any carrier in the region and was ``ideally suited for international flying from our regional ports and on our short-haul leisure routes''.
===========================================
Dow Jones
Australia's Backpackers Xpress To Launch Air Services
By Lilly Vitorovich
Of DOW JONES NEWSWIRES
BRISBANE (Dow Jones)--Backpackers Xpress Group, a budget international startup airline, said Friday it plans to challenge Australia's Qantas Airways Ltd. and others from the second half of 2004.
The airline, which will cater to backpackers, holiday makers and students, expects to commence operations from Australia during the second half of the year, no later than November, according to documents lodged with the International Air Services Commission.
Backpackers Xpress, which was founded by Glenn Millen and Gordon Layton, will initially have a fleet of two leased Boeing 747s, company spokesman Don Norton told Dow Jones Newswires.
Depending on initial demand, the airline will progressively increase its fleet.
"We are looking to lease, and that depends on the structure that we manage to establish and negotiations we may have with other carriers," Norton said.
The Brisbane-based company, which is majority-owned by Millen and Layton with the rest held by private investors, is also seeking new investors, with the aim of raising up to A$50 million.
An initial public offering is possible "in due course," he added.
The founders plan to sell down their stakes to new investors, Norton said. He added the group has held talks with both Qantas and Singapore Airlines Ltd. but declined to say whether a deal is imminent with either airline.
Backpackers Express will target the lucrative international leisure market, particularly the 2 million backpackers and holiday makers that pass through airport gates around the country.
"There are something in the order of 500,000 backpackers and probably 1.4-1.5 million independent travelers that visit Australia every year," Norton said.
Virgin Blue Holdings Ltd. has secured just over 30% of the Australian aviation market since takeoff in August 2000. Its initial focus on the local leisure market has proved very profitable and helped the no-frills airline, which was established by U.K. businessman Richard Branson, fend off Qantas.
Australia's largest airline has had to review its local operations and is in the process of setting up a budget domestic carrier Jetstar to compete head-to-head with Virgin Blue.
Earlier this year, Virgin Blue launched Pacific Blue, a subsidiary international airline. Pacific Blue flies between Australia and New Zealand and is expected to start services to Fiji in September. In the past year or so, Virgin Blue has started to chase the business market.
Both, Virgin Blue and Qantas have been linked to Malaysian no-frills carrier, AirAsia.
Virgin Blue has declined to comment on a media report that it's close to a deal with AirAsia. If the deal goes ahead, AirAsia would sell a stake to Virgin Blue in "a matter of weeks," according to The Asian Wall Street Journal.
Qantas was also tightlipped.
The Australian aviation market is already crowded. Some 50 airlines operate to and from the nation's biggest airport, Sydney Airport, of which 34 are international carriers.
Virgin Atlantic, which was also founded by Branson, is expected to jet into Sydney mid-2004 after winning its long battle to fly between London and Sydney last year.
Backpackers Xpress lodged two applications Wednesday with IASC seeking allocations for capacity on the Thailand, India, U.K. and Germany routes.
It has applied for capacity allocation to operate five services a week to Thailand using Boeing 747s as well as two services a week to Germany.
The airline also has applied to operate three services a week to the U.K. after Qantas requested additional capacity allocation for seven services a week.
On the India route, both airlines have applied for capacity, which currently totals some 2,100 seats a week.
Initially, Backpackers Xpress plans to sell 200,000 seats annually, Norton said.
The airline is in the process of securing an operator's certificate. Gene Mashlan has been chosen to be the airline's chief executive, pending approval from the Civil Aviation Safety Authority.
The comments follow a media report that another new international airline is expected to enter the Australian market by December and is seeking to raise A$34 million from local investors.
Leisurejet plans to fly from Australia's two biggest cities, Sydney and Melbourne, to destinations in Asia and Europe, the Australian Financial Review reported Friday.
The budget carrier is seeking funds from wealthy investors and private equity firms before a possible initial public offering within two to three years, the newspaper said, citing unidentified sources.
Earlier this month, Minardi formula one boss Paul Stoddart announced he would establish a no-frills domestic carrier, OzJet.
OzJet had hoped to begin flying sometime between October and Christmas, but now doesn't expect to take off until next year due to problems securing access to regional airports.
===========================================
New airlines eager to fly Australian skies
A new international carrier is set to enter the Australian market by the end of this year, and is seeking to raise $US25 million ($34 million) from local investors.
leisurejet is aiming to fly high-yield niche routes from Sydney and Melbourne to destinations in Asia and southern Europe.
The budget operator is seeking funds from wealthy individuals and private equity firms, before a possible public float within two to three years.
The leisurejet start-up is also targeting budget travellers and those visiting family and friends.
It initially plans to run flights from Sydney and Melbourne to Greece and Italy via Kuala Lumpur .
According to one private investor who has seen its business plan, the airline aims to have revenue of $100 million in the first year, growing to $155 million within five years.
Sources familiar with leisurejet say the business plan was formulated two years ago but that it has been ``waiting for the appropriate conditions to launch''.
At this stage it plans to begin flights in the third quarter of this year, using Airbus A320s and A330s.
It is unclear what funding commitments it has received.
The recovery of the global aviation market and the relatively low barriers to entry in Australia have resulted in a host of new operators trying to enter the market.
Motor racing identity Paul Stoddart had planned to start his cut-price domestic airline, OzJet , in October but this has been delayed for 18 months due to problems with accessing secondary airports.
Another potential new entrant is BackpackersXpress , which hopes to run a low-cost service between Australia and Europe from the middle of this year.
As the name suggests, backpackers are its target market, and the airline's two chartered Boeing 747s will have a pub and live entertainment as well as two enormous VB logos on the engines.
The regional aviation industry has made plenty of headlines of late, and there has been speculation that either Qantas or Virgin Blue will take a stake in Malaysian budget carrier AirAsia.
The airline, run by Tony Fernandes, is preparing for a public float that could value the company as high as $1.3 billion .
The Asian Wall Street Journal has been reporting that Virgin could buy a stake in AirAsia in the next few weeks, but neither Qantas nor Virgin would comment on their plans regarding the airline.
Meanwhile, Air New Zealand announced on Wednesday that it was ramping up capacity on trans-Tasman routes by 10 per cent a year.
New Zealand's once tottering airline is taking an aggressive stance in the face of increased competition from its Australian rivals and airlines such as Emirates and Lan Chile.
The airfare war across the Tasman has been heating up since Virgin Blue announced its intention to fly the route using its Pacific Blue subsidiary.
In addition, airlines such as Emirates have gained the right to add the trans-Tasman route to their itineraries.
Air New Zealand subsidiary Freedom Air is also beefing up capacity on the trans-Tasman route. It announced yesterday that it was adding one more aircraft to its fleet, giving it 25 per cent more seats.
Air New Zealand head Ralph Norris said Freedom Air had the lowest cost base of any carrier in the region and was ``ideally suited for international flying from our regional ports and on our short-haul leisure routes''.
===========================================
Dow Jones
Australia's Backpackers Xpress To Launch Air Services
By Lilly Vitorovich
Of DOW JONES NEWSWIRES
BRISBANE (Dow Jones)--Backpackers Xpress Group, a budget international startup airline, said Friday it plans to challenge Australia's Qantas Airways Ltd. and others from the second half of 2004.
The airline, which will cater to backpackers, holiday makers and students, expects to commence operations from Australia during the second half of the year, no later than November, according to documents lodged with the International Air Services Commission.
Backpackers Xpress, which was founded by Glenn Millen and Gordon Layton, will initially have a fleet of two leased Boeing 747s, company spokesman Don Norton told Dow Jones Newswires.
Depending on initial demand, the airline will progressively increase its fleet.
"We are looking to lease, and that depends on the structure that we manage to establish and negotiations we may have with other carriers," Norton said.
The Brisbane-based company, which is majority-owned by Millen and Layton with the rest held by private investors, is also seeking new investors, with the aim of raising up to A$50 million.
An initial public offering is possible "in due course," he added.
The founders plan to sell down their stakes to new investors, Norton said. He added the group has held talks with both Qantas and Singapore Airlines Ltd. but declined to say whether a deal is imminent with either airline.
Backpackers Express will target the lucrative international leisure market, particularly the 2 million backpackers and holiday makers that pass through airport gates around the country.
"There are something in the order of 500,000 backpackers and probably 1.4-1.5 million independent travelers that visit Australia every year," Norton said.
Virgin Blue Holdings Ltd. has secured just over 30% of the Australian aviation market since takeoff in August 2000. Its initial focus on the local leisure market has proved very profitable and helped the no-frills airline, which was established by U.K. businessman Richard Branson, fend off Qantas.
Australia's largest airline has had to review its local operations and is in the process of setting up a budget domestic carrier Jetstar to compete head-to-head with Virgin Blue.
Earlier this year, Virgin Blue launched Pacific Blue, a subsidiary international airline. Pacific Blue flies between Australia and New Zealand and is expected to start services to Fiji in September. In the past year or so, Virgin Blue has started to chase the business market.
Both, Virgin Blue and Qantas have been linked to Malaysian no-frills carrier, AirAsia.
Virgin Blue has declined to comment on a media report that it's close to a deal with AirAsia. If the deal goes ahead, AirAsia would sell a stake to Virgin Blue in "a matter of weeks," according to The Asian Wall Street Journal.
Qantas was also tightlipped.
The Australian aviation market is already crowded. Some 50 airlines operate to and from the nation's biggest airport, Sydney Airport, of which 34 are international carriers.
Virgin Atlantic, which was also founded by Branson, is expected to jet into Sydney mid-2004 after winning its long battle to fly between London and Sydney last year.
Backpackers Xpress lodged two applications Wednesday with IASC seeking allocations for capacity on the Thailand, India, U.K. and Germany routes.
It has applied for capacity allocation to operate five services a week to Thailand using Boeing 747s as well as two services a week to Germany.
The airline also has applied to operate three services a week to the U.K. after Qantas requested additional capacity allocation for seven services a week.
On the India route, both airlines have applied for capacity, which currently totals some 2,100 seats a week.
Initially, Backpackers Xpress plans to sell 200,000 seats annually, Norton said.
The airline is in the process of securing an operator's certificate. Gene Mashlan has been chosen to be the airline's chief executive, pending approval from the Civil Aviation Safety Authority.
The comments follow a media report that another new international airline is expected to enter the Australian market by December and is seeking to raise A$34 million from local investors.
Leisurejet plans to fly from Australia's two biggest cities, Sydney and Melbourne, to destinations in Asia and Europe, the Australian Financial Review reported Friday.
The budget carrier is seeking funds from wealthy investors and private equity firms before a possible initial public offering within two to three years, the newspaper said, citing unidentified sources.
Earlier this month, Minardi formula one boss Paul Stoddart announced he would establish a no-frills domestic carrier, OzJet.
OzJet had hoped to begin flying sometime between October and Christmas, but now doesn't expect to take off until next year due to problems securing access to regional airports.
===========================================