lame
13th May 2004, 06:20
Backpackers Xpress in Talks With U.K. Airline
May 13 (Bloomberg) --
Backpackers Xpress Pty, which is seeking funding for an all-economy-class airline to carry budget travelers between Australia, Asia and Europe, is in talks about a venture with a U.K. airline, Managing Director Glenn Millen said.
The airline, which will have a smiley-face logo and on-board bars, plans to fly between Manchester and Melbourne, with stopovers in New Delhi and Bangkok. If talks on the alliance today fail, the six founders will try to raise A$50 million ($35 million) to run the airline alone, Millen said in an interview.
Richard Branson's Virgin Atlantic Airways also plans to start flying between London and Sydney via Hong Kong later this year, as competition mounts on a route dominated by Qantas Airways Ltd. and British Airways Plc. The Brisbane-based airline may struggle to convince investors to fund it, said analysts including Peter Harbison
``People tend to be pretty wary about the aviation industry, particularly an individual operation like this where the guys don't have a track record,'' said Harbison, the managing director of the Centre for Asia-Pacific Aviation in Sydney. ``It will be hard for them to convince people to put up the money.''
Backpackers Xpress plans to start flying with two leased Boeing 747 planes, Millen, 45, said. His partners include former Qantas training captain Gordon Layton, 70, and Bevan Whittaker, 74, founder of regional carrier Sunstate Airlines, now owned by Qantas.
Singapore Airlines Ltd.'s Australian spokesman Stephen Forshaw said the carrier is in talks about selling or leasing planes to Backpackers Xpress. No discussions had been held about Singapore Air taking an equity stake in the budget carrier, he said.
Millen wouldn't name the U.K. airline he is in talks with. He will meet executives from the airline today.
Backpackers Xpress is yet to formally apply for the air operators certificate all Australian commercial aviation businesses must have, according to Civil Aviation Safety Authority spokesman Peter Gibson. ``The airline has asked for a pre-application meeting with us late this month,'' Gibson said.
About 459,000 so-called backpackers visited Australia last year, accounting for a tenth of all tourists to the country. They stayed for an average 64 days and spent A$2.2 billion, according to the Australian Tourist Commission. A quarter of all backpackers, who arrive without a set itinerary and use low-cost accommodation such as youth hostels, are from the U.K.
Depending on the type of aircraft leased, a return Manchester- Melbourne ticket will cost between 600 pounds ($1,144) to 650 pounds, for English tourists and A$1,800 to A$1,850 for Australians, Millen said. Flight dates can be changed without penalty and there's no time limit for the return journey.
``The long-haul market is difficult -- you can be picked off so easily because there's a lot of seats flying it at quite low prices,'' Harbison said.
`Kangaroo Route'
Qantas flies 21 times a week on the so-called ``Kangaroo Route'' from Sydney to London. It will start flights to Mumbai in September.
Backpackers Xpress also plans to fly from Melbourne to Munich twice a week and later offer services from Australia to Honolulu, Vancouver and Las Vegas, Millen said.
The airline, which has 14 employees, will hire about 400 people before its November start, Millen said. Former Goldman Sachs JBWere Ltd. transport analyst Anthony Srom has been hired as a consultant, said Don Norton, corporate communications manager at Backpackers Xpress. Srom hosted two briefings with Goldman Sach's institutional clients for Backpackers Xpress before he quit the bank on April 21, Goldman Sach's public relations manager Sue Palmer said in an e-mail response to questions.
Millen said he's targeting an initial public offer or trade sale in two to three years. ``We can clearly demonstrate we have a market that continued to travel post-SARS, post Sept. 11,'' he said. ``The backpacker market has slipped under everyone's radar -- it's become a far more sophisticated market, with 17- to 70-year-olds picking up this style.''
May 13 (Bloomberg) --
Backpackers Xpress Pty, which is seeking funding for an all-economy-class airline to carry budget travelers between Australia, Asia and Europe, is in talks about a venture with a U.K. airline, Managing Director Glenn Millen said.
The airline, which will have a smiley-face logo and on-board bars, plans to fly between Manchester and Melbourne, with stopovers in New Delhi and Bangkok. If talks on the alliance today fail, the six founders will try to raise A$50 million ($35 million) to run the airline alone, Millen said in an interview.
Richard Branson's Virgin Atlantic Airways also plans to start flying between London and Sydney via Hong Kong later this year, as competition mounts on a route dominated by Qantas Airways Ltd. and British Airways Plc. The Brisbane-based airline may struggle to convince investors to fund it, said analysts including Peter Harbison
``People tend to be pretty wary about the aviation industry, particularly an individual operation like this where the guys don't have a track record,'' said Harbison, the managing director of the Centre for Asia-Pacific Aviation in Sydney. ``It will be hard for them to convince people to put up the money.''
Backpackers Xpress plans to start flying with two leased Boeing 747 planes, Millen, 45, said. His partners include former Qantas training captain Gordon Layton, 70, and Bevan Whittaker, 74, founder of regional carrier Sunstate Airlines, now owned by Qantas.
Singapore Airlines Ltd.'s Australian spokesman Stephen Forshaw said the carrier is in talks about selling or leasing planes to Backpackers Xpress. No discussions had been held about Singapore Air taking an equity stake in the budget carrier, he said.
Millen wouldn't name the U.K. airline he is in talks with. He will meet executives from the airline today.
Backpackers Xpress is yet to formally apply for the air operators certificate all Australian commercial aviation businesses must have, according to Civil Aviation Safety Authority spokesman Peter Gibson. ``The airline has asked for a pre-application meeting with us late this month,'' Gibson said.
About 459,000 so-called backpackers visited Australia last year, accounting for a tenth of all tourists to the country. They stayed for an average 64 days and spent A$2.2 billion, according to the Australian Tourist Commission. A quarter of all backpackers, who arrive without a set itinerary and use low-cost accommodation such as youth hostels, are from the U.K.
Depending on the type of aircraft leased, a return Manchester- Melbourne ticket will cost between 600 pounds ($1,144) to 650 pounds, for English tourists and A$1,800 to A$1,850 for Australians, Millen said. Flight dates can be changed without penalty and there's no time limit for the return journey.
``The long-haul market is difficult -- you can be picked off so easily because there's a lot of seats flying it at quite low prices,'' Harbison said.
`Kangaroo Route'
Qantas flies 21 times a week on the so-called ``Kangaroo Route'' from Sydney to London. It will start flights to Mumbai in September.
Backpackers Xpress also plans to fly from Melbourne to Munich twice a week and later offer services from Australia to Honolulu, Vancouver and Las Vegas, Millen said.
The airline, which has 14 employees, will hire about 400 people before its November start, Millen said. Former Goldman Sachs JBWere Ltd. transport analyst Anthony Srom has been hired as a consultant, said Don Norton, corporate communications manager at Backpackers Xpress. Srom hosted two briefings with Goldman Sach's institutional clients for Backpackers Xpress before he quit the bank on April 21, Goldman Sach's public relations manager Sue Palmer said in an e-mail response to questions.
Millen said he's targeting an initial public offer or trade sale in two to three years. ``We can clearly demonstrate we have a market that continued to travel post-SARS, post Sept. 11,'' he said. ``The backpacker market has slipped under everyone's radar -- it's become a far more sophisticated market, with 17- to 70-year-olds picking up this style.''