Qantas joins regional budget airline boom with Jetstar Asia
SINGAPORE : Australian national carrier Qantas has announced that its Asian budget venture, Jetstar Asia, will begin flying out of Singapore in December with prices as low as any of its rivals.
Qantas chief executive Geoff Dixon said Jetstar Asia, a joint operation with the Singapore's Temasek Holdings and two prominent local businessmen, will fly to destinations within five hours from the city-state.
Jetstar Asia, the sister airline of Jetstar Australia, will become the fourth budget carrier to begin flying out of Singapore in just seven months.
Signalling another round of ultra-cheap fares following Tiger Airways's launch this month with Singapore-Bangkok flights for one Singapore dollar (59 US cents), Dixon also promised heavy discounts early on as a marketing tool.
"We will have promotional fares. We are going to be as competitive as any of the low, low cost airlines," Dixon, who is Jetstar Asia's chairman, told reporters at the branding launch.
Dixon said that, over the longer term, Jetstar Asia's tickets will remain among the cheapest on the market.
"(Jetstar Asia will) have a cost base that will enable it to match the fares of its competitors and we very confident we can do that," he said.
Dixon would not reveal further details about how much fares would cost or what routes the airline would service, which he said were still dependent on the outcomes of discussions with Singapore authorities.
Although Singapore's Tiger Airways and Valuair, as well as Malaysia's Air Asia, have got a head start in Singapore, Dixon dismissed suggestions that Jetstar Asia would be disadvantaged by starting last.
"I'm not sure its always the best thing in the airline industry to be first off," he said.
"As a matter of fact I often think its best to wait to see how everybody else destroys themselves and then you come in and maybe pick up some of the pieces.
"I don't know where the other airlines will end up but I can assure you that Jetstar Asia.. will be around in three or four years' time."
Jetstar Asia will begin flights in December with two new 180-seat Airbus A320s. It plans to double the fleet in the first four weeks of operation, expand to eight aircraft in early 2005 and have 20 in the air in three years.
Jetstar Asia chief operating officer Con Korfiatis said the airline was in negotiations with Singapore's aviation authorities to operate out of Changi Airport's planned low-budget terminal, the first of its kind in Asia.
The terminal is due to be operational by early 2006.
Qantas has invested 50 million Singapore dollars for a 49.9 percent stake in Jetstar Asia, with Temasek owning another 19 percent.
Singaporean business executives Tony Chew and F.F. Wong own 21.1 percent and 10 percent, respectively. The pair had previously been involved with Myanmar Airways.
For Temasek, Jetstar Asia is the fourth Singapore-based Asian airline it has a stake in, adding to its interests in Singapore Airlines, Silk Air and Tiger Airways. Temasek also owns three percent of Qantas.
Dixon rejected assertions from a reporter that Temasek may have a conflict of interest in Singapore's aviation industry.
"It's not an issue. There are a lot of cross share holdings in other companies," he said.
- AFP
Copyright © 2004 Agence France Presse. All rights reserved.
Courtesy channelnewsasia.com - Wednesday, 29th September 2004
Qantas budget carrier Jetstar Asia to take off by year end
By Derek Cher, Channel NewsAsia
SINGAPORE : Qantas Airways says its Singapore-based low-cost carrier will take to the skies by the end of this year.
The carrier, called Jetstar Asia, is expected to get its Air Operator's Certificate by mid-November.
Qantas has invested S$50 million for a 49 percent stake in the airline.
Investment firm Temasek Holdings has a 19 percent stake, while two Singapore businessmen own the rest -- Del Monte chairman Tony Chew with 21 percent and Boustead chairman FF Wong with 10 percent.
Qantas also says Temasek had acquired a three percent stake in Qantas when British Airways sold its 18.2 percent stake in the Australian carrier earlier this month.
Jetstar Asia will be the fourth budget carrier to operate out of Singapore.
It will start flying with four leased Airbus A320s to destinations within five hours of Singapore.
The airline plans to operate 20 aircraft within three years.
"There are three other airlines that have started before us. I am not sure it is always the best thing in the airline industry to be first off. As a matter of fact, I often think it is best to wait and see how everybody else destroys themselves and come in, maybe pick up the pieces. But we are very confident of the timing," Qantas chief executive Geoff Dixon said.
Jetstar Asia's intended take-off also comes as oil prices surge to record levels.
But Qantas says the budget carrier will not start with a fuel surcharge unless the situation worsens over the next two months.
Qantas also has no plans to raise its own fuel surcharge.
Even though Jetstar Asia isn't saying what its price structure will be, the airline is confident it has a very low cost base that will enable it to match the fares of its competitors.
Qantas expects Jetstar Asia to get some decent air traffic rights in the region.
It also envisages regional markets opening up, with the proliferation of low-cost carriers.
Qantas does not expect to inject more money into Jetstar Asia.
It says the combined S$100 million investment is sufficient for the airline to achieve profitability.
"I don't know where the other airlines will end up. But I can assure you that Jetstar Asia and Jetstar Australia will be around in three to four years' time," Mr Dixon said.
Qantas says it doesn't see Temasek holding stakes in rivals Singapore Airlines, SilkAir and Tiger Airways as a conflict of interest, since cross-shareholdings are common in the airline industry.
Jetstar Asia is now in talks with Singapore authorities on the possible use of its budget terminal. - CNA
Copyright © 2004 MCN International Pte Ltd
Courtesy channelnewsasia.com - Wednesday, 29th September 2004
Got some insider news about a month back - Jetstar Asia applied to fly to TPE.
That's great news! Finally, a budget airline heading for my favourite destination.
SQ22
JetStar Asia first aircraft has been delivered.
No. But I watch the airline industry closely.