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``Our job will be to create profitable flying on routes Qantas has withdrawn from or on routes from where Qantas has been unable to extract a satisfactory return,'' Denis Adams, chief executive of the new carrier, said in the statement.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.