Wirraway
3rd Apr 2005, 17:39
Mon "Dominion Post" NZ
Qantas has 'Jetstar option'
04 April 2005
By ROELAND VAN DEN BERGH
Qantas could pit its budget offshoot Jetstar against Air New Zealand rather than enter a trans-Tasman fleet-sharing agreement with the national carrier, Centre for Asia Pacific Aviation analyst Ian Thomas says.
Air New Zealand has raised the prospect of asking the Government to approve an air share agreement, which would allow it and Qantas to sell seats on each other's planes in a bid to return the Tasman route to profitability.
Though Transport Minister Pete Hodgson has the power to grant the agreement, it would fly in the face of the Commerce Commission's decision to reject an alliance application from the airlines.
Mr Thomas said an air share agreement was likely to be of more interest to Air New Zealand than Qantas, which appeared to have moved on from the alliance.
One option available to Qantas to reduce its costs on the Tasman was to use Jetstar on the route, possibly as soon as next year, Mr Thomas said.
Jetstar was launched last May as a foil to Virgin Blue on domestic Australian routes. It took over the assets of budget operator Impulse, which was bought by Qantas in 2001.
With its much lower cost base, Jetstar would operate along the same lines as Air New Zealand's equivalent, Freedom Air, to improve margins and profits.
Jetstar would fly at leisure times to the main centres to avoid competing head on with the main Qantas brand, and also to secondary destinations such as Hamilton and Queenstown, where it would compete with Freedom. "That would enable them to certainly restore an element of profitability to the market, if not profits to the whole market," Mr Thomas said.
Jetstar is progressively introducing a fleet of 23 Airbus A320 jets by the middle of next year, replacing smaller Boeing 717s.
The additional capacity would put pressure on the airline to add more destinations.
"They will reach a state where they start looking at the Tasman seriously," Mr Thomas said.
Chief executive Alan Joyce said last week that Jetstar would expand its Australian domestic network and consider entering some international markets. He has previously said he expected Jetstar to be flying internationally within two years, a view supported by Qantas chief executive Geoff Dixon.
Spokesman Simon Westaway said the airline still had some growth left in Australia, including adding Western Australia and the Northern Territory to its network. "We are interested in the medium term to look at some international operations."
The current fleet of aircraft was fully committed till at least October, Mr Westaway said.
Air New Zealand's group general manager of airlines, Rob Fyfe, said Jetstar's success in Australia would encourage it to look to New Zealand.
But he doubted Jetstar, or Virgin Blue's international arm Pacific Blue, would compete with Freedom on secondary routes given the limited growth available in those markets.
"I'm not sure if the regional routes necessarily will be their focus," Mr Fyfe said. "They are not particularly thick markets, so the opportunity to grow those markets is relatively limited."
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Qantas has 'Jetstar option'
04 April 2005
By ROELAND VAN DEN BERGH
Qantas could pit its budget offshoot Jetstar against Air New Zealand rather than enter a trans-Tasman fleet-sharing agreement with the national carrier, Centre for Asia Pacific Aviation analyst Ian Thomas says.
Air New Zealand has raised the prospect of asking the Government to approve an air share agreement, which would allow it and Qantas to sell seats on each other's planes in a bid to return the Tasman route to profitability.
Though Transport Minister Pete Hodgson has the power to grant the agreement, it would fly in the face of the Commerce Commission's decision to reject an alliance application from the airlines.
Mr Thomas said an air share agreement was likely to be of more interest to Air New Zealand than Qantas, which appeared to have moved on from the alliance.
One option available to Qantas to reduce its costs on the Tasman was to use Jetstar on the route, possibly as soon as next year, Mr Thomas said.
Jetstar was launched last May as a foil to Virgin Blue on domestic Australian routes. It took over the assets of budget operator Impulse, which was bought by Qantas in 2001.
With its much lower cost base, Jetstar would operate along the same lines as Air New Zealand's equivalent, Freedom Air, to improve margins and profits.
Jetstar would fly at leisure times to the main centres to avoid competing head on with the main Qantas brand, and also to secondary destinations such as Hamilton and Queenstown, where it would compete with Freedom. "That would enable them to certainly restore an element of profitability to the market, if not profits to the whole market," Mr Thomas said.
Jetstar is progressively introducing a fleet of 23 Airbus A320 jets by the middle of next year, replacing smaller Boeing 717s.
The additional capacity would put pressure on the airline to add more destinations.
"They will reach a state where they start looking at the Tasman seriously," Mr Thomas said.
Chief executive Alan Joyce said last week that Jetstar would expand its Australian domestic network and consider entering some international markets. He has previously said he expected Jetstar to be flying internationally within two years, a view supported by Qantas chief executive Geoff Dixon.
Spokesman Simon Westaway said the airline still had some growth left in Australia, including adding Western Australia and the Northern Territory to its network. "We are interested in the medium term to look at some international operations."
The current fleet of aircraft was fully committed till at least October, Mr Westaway said.
Air New Zealand's group general manager of airlines, Rob Fyfe, said Jetstar's success in Australia would encourage it to look to New Zealand.
But he doubted Jetstar, or Virgin Blue's international arm Pacific Blue, would compete with Freedom on secondary routes given the limited growth available in those markets.
"I'm not sure if the regional routes necessarily will be their focus," Mr Fyfe said. "They are not particularly thick markets, so the opportunity to grow those markets is relatively limited."
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