Yawn
23rd Jun 2004, 10:56
Qantas optimistic Jetstar to be profitable
By Virginia Marsh in Sydney
Published: June 23 2004 10:35 | Last Updated: June 23 2004 10:35
Qantas, Australia's dominant airline, said on Wednesday that Jetstar, its new discount domestic carrier, was performing significantly ahead of expectations and could be profitable by as early as next month, just weeks after its launch.
“We have some confidence that in the first month of the new financial year [which starts in July] it may be profitable which is quite significantly ahead of our expectations,” said Geoff Dixon, Qantas chief executive. “Loads are better than expected and indeed the average fare is better than expected.”
The airline had said it hoped the new carrier which sold more than 250,000 one-way fares before it began operations in late May would become profitable in its first year. Qantas launched Jetstar to help it lower costs and counter the threat posed by Virgin Blue, the no-frills carrier that has gobbled up more than 30 per cent of the domestic market in less than four years.
Qantas has invested about A$100m in the new airline, one of three new carriers it will launch within a two-year period. It has already launched Australian Airlines, a Cairns-based leisure carrier, and hopes to start a Singapore-based discount operation later this year.
The stronger-than-expected start for Jetstar comes despite scepticism about its likely success given the poor track record other legacy airlines such as British Airways, Qantas' biggest shareholder, have had with discount carriers.
In a separate development this week also aimed at cost-cutting, Qantas said it would almost double the number of its flight attendants based abroad to 19 per cent by moving 400 jobs to London. It will also move 250 flight attendants to Brisbane with existing staff offered the chance to relocate in both cases. The move is set to save it A$18m a year but is liable to meet with resistance from the airline's powerful unions.
By Virginia Marsh in Sydney
Published: June 23 2004 10:35 | Last Updated: June 23 2004 10:35
Qantas, Australia's dominant airline, said on Wednesday that Jetstar, its new discount domestic carrier, was performing significantly ahead of expectations and could be profitable by as early as next month, just weeks after its launch.
“We have some confidence that in the first month of the new financial year [which starts in July] it may be profitable which is quite significantly ahead of our expectations,” said Geoff Dixon, Qantas chief executive. “Loads are better than expected and indeed the average fare is better than expected.”
The airline had said it hoped the new carrier which sold more than 250,000 one-way fares before it began operations in late May would become profitable in its first year. Qantas launched Jetstar to help it lower costs and counter the threat posed by Virgin Blue, the no-frills carrier that has gobbled up more than 30 per cent of the domestic market in less than four years.
Qantas has invested about A$100m in the new airline, one of three new carriers it will launch within a two-year period. It has already launched Australian Airlines, a Cairns-based leisure carrier, and hopes to start a Singapore-based discount operation later this year.
The stronger-than-expected start for Jetstar comes despite scepticism about its likely success given the poor track record other legacy airlines such as British Airways, Qantas' biggest shareholder, have had with discount carriers.
In a separate development this week also aimed at cost-cutting, Qantas said it would almost double the number of its flight attendants based abroad to 19 per cent by moving 400 jobs to London. It will also move 250 flight attendants to Brisbane with existing staff offered the chance to relocate in both cases. The move is set to save it A$18m a year but is liable to meet with resistance from the airline's powerful unions.