Wirraway
25th Jun 2004, 09:02
AAP
Expert wary of Jetstar success
17:55 AEST
Fri Jun 25 2004
Qantas' budget offshoot Jetstar has just a 50 per cent chance of success, according to a senior air industry forecaster.
"I'm not 100 per cent convinced that Jetstar will be around in five years time," British Airports Authority (BAA) research director Stan Maiden says.
"It's got to be at least 50 per cent likely Jetstar won't work as a model. If you look at airlines around the world that have done that sort of thing, it's quite difficult to have a part of your entity which is operating to a totally different cost structure, competing with yourself."
BAA is the owner of seven airports in the UK, including Heathrow - the world's busiest, and is a partner of the Australian Infrastructure Fund which has stakes in Melbourne, Perth and Darwin airports.
Mr Maiden said just 10-20 per cent of start-up carriers in the UK and Europe had succeeded, including British Airway's low cost carrier Go.
"I'm totally confident that the Virgin Blue model will work but on Jetstar I would say the jury is out," he told analysts in Sydney.
New to the skies, Jetstar launched its first services in May, taking on the Richard Branson-backed Virgin Blue, which now has taken more than 30 per cent of the local domestic market since it began three years ago.
Mr Maiden is not the first expert to cast doubt on Jetstar's chance of survival: four weeks ago Flight Centre chief Graham Turner said Jetstar's decision not to use travel agent distribution would hurt the carrier's numbers.
Mr Maiden, a forecaster since the 1960s, was critical of Jetstar's decision to run services from Avalon in Victoria as an alternative to Tullamarine.
"If they were going to make a success out of Avalon they shouldn't have operated any Jetstar services from Melbourne, they are competing with themselves," he said.
"Apart from cheaper parking I don't see what Avalon has got going for it, I don't see that as being sustainable."
On the same subject, Mr Maiden believes a second international airport for Sydney is both unnecessary and would not be used if it was built.
A then state-of-the-art airport on the outskirts of the Canadian city of Montreal, built in 1975, has recently been mothballed due to a lack of use.
"Unless you are in an economy where you can dictate that the closest-to-town airport will close the other will never compete," he said.
Sydney Airport could be used more intensively, Mr Maiden said, pointing out that London's Heathrow now handles 460,000 flights per year when government experts had once said it could safely cope with no more than 350,000.
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Expert wary of Jetstar success
17:55 AEST
Fri Jun 25 2004
Qantas' budget offshoot Jetstar has just a 50 per cent chance of success, according to a senior air industry forecaster.
"I'm not 100 per cent convinced that Jetstar will be around in five years time," British Airports Authority (BAA) research director Stan Maiden says.
"It's got to be at least 50 per cent likely Jetstar won't work as a model. If you look at airlines around the world that have done that sort of thing, it's quite difficult to have a part of your entity which is operating to a totally different cost structure, competing with yourself."
BAA is the owner of seven airports in the UK, including Heathrow - the world's busiest, and is a partner of the Australian Infrastructure Fund which has stakes in Melbourne, Perth and Darwin airports.
Mr Maiden said just 10-20 per cent of start-up carriers in the UK and Europe had succeeded, including British Airway's low cost carrier Go.
"I'm totally confident that the Virgin Blue model will work but on Jetstar I would say the jury is out," he told analysts in Sydney.
New to the skies, Jetstar launched its first services in May, taking on the Richard Branson-backed Virgin Blue, which now has taken more than 30 per cent of the local domestic market since it began three years ago.
Mr Maiden is not the first expert to cast doubt on Jetstar's chance of survival: four weeks ago Flight Centre chief Graham Turner said Jetstar's decision not to use travel agent distribution would hurt the carrier's numbers.
Mr Maiden, a forecaster since the 1960s, was critical of Jetstar's decision to run services from Avalon in Victoria as an alternative to Tullamarine.
"If they were going to make a success out of Avalon they shouldn't have operated any Jetstar services from Melbourne, they are competing with themselves," he said.
"Apart from cheaper parking I don't see what Avalon has got going for it, I don't see that as being sustainable."
On the same subject, Mr Maiden believes a second international airport for Sydney is both unnecessary and would not be used if it was built.
A then state-of-the-art airport on the outskirts of the Canadian city of Montreal, built in 1975, has recently been mothballed due to a lack of use.
"Unless you are in an economy where you can dictate that the closest-to-town airport will close the other will never compete," he said.
Sydney Airport could be used more intensively, Mr Maiden said, pointing out that London's Heathrow now handles 460,000 flights per year when government experts had once said it could safely cope with no more than 350,000.
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