Wirraway From Australia, joined Mar 2001, 1321 posts, RR: 1 Posted (12 years 10 months 2 weeks 4 days 8 hours ago) and read 2353 times:
Qantas to start low-cost airline
By DARREN GOODSIR
Tuesday 11 December 2001
Qantas will defy the airline industry's bleak outlook and confirm today that it will launch a low-cost international carrier, Australian Airlines, in August with up to a dozen destinations.
Qantas had planned to start services from April but the aviation market's vulnerability since the September 11 terrorist attacks, and only weak signs of a rebound in bookings in the new year, last week convinced the board to delay the launch.
More than 250,000 airline workers have lost their jobs internationally in the past three months. Passenger loads have slumped by up to 30 per cent.
Qantas also announced changes to its domestic operations yesterday, with flights every 30 minutes in morning and afternoon peaks between Sydney and Brisbane, and Melbourne and Brisbane.
The strategy aims to gazump main rival Ansett ahead of the relaunch planned for February.
Qantas says Australian Airlines, a wholly owned subsidiary employing up to 8000 people and using only one type of plane, with economy and super-economy or business class seats, will be a full-service operation, with frequent flyer points able to be used on both carriers.
Qantas is expected to buy Boeing 767-200s, with room for 270 passengers.
Australian Airlines intends to fly to Asian and Pacific cities, but some Qantas routes that have high-cost margins may be added. The airlines will not fly on identical routes.
Qantas has previously flagged its desire to fly to Tahiti, Kuala Lumpur, Ho Chi Minh City, Shanghai, Seoul, Sapporo and Fukuoka.
It believes new planes, lower costs and Internet ticketing can reduce overheads sufficiently to get back into markets where Qantas has not been able to make profits.
Qantas' former marketing boss, Denis Adams, the airline's new chief executive, will outline flight plans today.
The new services follow the successful launch of the CityFlyer service to Melbourne last July.
Meanwhile, the Federal Court could today decide the fate of an agreement between Ansett administrators and the Federal Government over a $195 million federal loan to help cover staff entitlements.
Justice Alan Goldberg was told last week told that the proposed sale of Ansett to Melbourne businessmen Lindsay Fox and Solomon Lew could collapse if a deal enshrining the terms of the loan between the government and administors was not approved.
However, Justice Goldberg said unsecured creditors had not had the opportunity to raise concerns about the deed. He therefore delayed approval of the deal and ordered it tobe well advertised to allow time for any concerned parties to make representations to the court today.
Ciro From Brazil, joined Aug 1999, 662 posts, RR: 6
Reply 2, posted (12 years 10 months 2 weeks 4 days 7 hours ago) and read 2209 times:
I hope for the best, even though I´m not very optimistic with a low-cost international airline. The marginal cost to agregate better in-flight service is minimum when flying long distances. Besides, I think most people would pay a bit more for their own dignity, instead of flying 6 or 8 hours in a 767-200 filled with 270 passengers and a couple of toillets.
People Express has already taught us that major airlines can easily match the low-fares of new entrants in international routes. Also, it is much more difficult to guide larger planes to secondary airports due to the lack of facilities and little capacity to retain some extra traffic smaller airports can generate to feed intil´routes, thus a low-cost international airline would compete in the expensive-to-land, hub-positioned airports. By the way, I think most important Asian cities do not have a secondary international airport.
Finally, major airlines have difficulty in handling its own low-cost carriers. That´s because of the corporation culture and marketing strategy (there´s a risk to diminish the parent company brand value). Just remember the Continental Lite experience...
The fastest way to become a millionaire in the airline business is to start as a billionaire.
Wirraway From Australia, joined Mar 2001, 1321 posts, RR: 1
Reply 11, posted (12 years 10 months 2 weeks 3 days 22 hours ago) and read 2048 times:
Qantas Says Its New Discount Carrier Will Begin Flights
in September 2002
By Sineva Toevai
Sydney, Dec. 11 (Bloomberg) -- Qantas Airways Ltd., Australia's largest airline, said its new budget carrier will begin operations in September next year.
Australian Airlines will start flights between Cairns and six Asian cities, including Osaka, Nagoya and Fukuoka in Japan, Singapore, Taipei and Hong Kong, the company said in a statement to the Australian Stock Exchange.
``Our job will be to create profitable flying on routes Qantas has withdrawn from or on routes from where Qantas has been unable to extract a satisfactory return,'' Denis Adams, chief executive of the new carrier, said in the statement.
Qantas is expanding after its main rival, Ansett Holdings Ltd., went bankrupt three months ago. Richard Branson's Virgin Blue, the only other national competitor, has grown by paring costs and offering cheap fares since it started flying last year.
``Clearly what they want to do is get a foothold (on Asian routes) before anyone else does,'' said Andrew Sekely, a broker at Intersuisse Ltd. in Sydney. ``It's a way of sidelining any potential opposition.''
Qantas shares fell as much as 1.8 percent to A$3.93 in Sydney trading.
Australian Airlines won't fly on any routes operated by Qantas, Adams said. The new carrier will join Qantas's frequent flyer program and seek membership of the Oneworld airline alliance.
The new discount carrier will begin services with four Boeing Co. 767-300 aircraft, expanding its fleet of the twin-engine planes to 12, the company said.
While the new airline will have its head office in Sydney, its first operational base will be in Cairns. A second base will be established in a southern Australian capital, the company said.
The company is negotiating with unions on wages, working conditions and practices, Adams said.
``Provided these are concluded satisfactorily, we will be in a position to commence flying around September next year,'' he said.