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Asian airlines offer cheap
fares to Aussies
Australians, who are enjoying their
lowest unemployment levels in three decades amidst a major
resources boom, are discovering the joys of cheap air travel.
Although the key Asian competitors have yet to arrive, the
Qantas-owned cut-fare subsidiary, Jetstar, has launched a full
blown campaign to stymie the impending onslaught to maintain its
profitable niche.
Its biggest competitor the Singapore Airlines affiliate, Tiger
Air, which will commence Australian domestic operations on Nov 23,
from its base in Melbourne with a fleet of 50 brand new Airbus
A320s.
Tiger’s chief executive Tony Davis has been coy about its strategy
to become Australia’s first new domestic carrier in several years,
promising genuine low fares rather than short-lived promotions.
Jetstar, of course, is making no such promises.
Yesterday it offered 10,000 first-come-first-served tickets at A$1
each for flights from Melbourne to Hobart, Newcastle or Launceston
and from Brisbane to Newcastle, Mackay and Rockhampton.
Travel is limited to February next year.
Going places on A$50
Jetstar chief executive Tony Joyce says that in the first three
years of operation Jetstar has carried more than 17 million
passengers with one million travelling on a one-way fare of less
than A$50 and eight million on fares less than A$100.
Jetstar now services 20 Australian destinations.
Davis, meanwhile, yesterday was involved in a Brisbane launch
where he said Tiger would kick off with direct flights from
Melbourne to the Gold Coast, Rockhampton and Mackay. The Gold
Coast flight will cost A$49.95 and the other routes A$59.95,
although Jetstar presently offers limited seats at A$39 from
Melbourne to the Gold Coast.
Richard Branson’s Virgin Blue, Jetstar’s main competitor at
present, also provide cheap fares to various Australian and
international destinations.
Slashing flight
costs to Europe
The first of the new breed of international Asian carriers will be
the Macau-based Viva Macau, which will introduce a A$305 one-way
fare from Sydney to the world’s top gambling destination – Macau,
which recently overtook Las Vegas in total turnover. Aviation
analysts suggest a short ferry ride to nearby Hong Kong and a
flight on another budget carrier, Oasis, would enable Australians
to get to London on a total one-way fare of A$600, inclusive of
taxes.
However, an expert with the Centre of Asia-Pacific Aviation, Derek
Sadubin, has been quoted as suggesting that despite a lower key
launch, it will be Malaysia’s AirAsia X that is going to
revolutionise Australia’s international travel.
Its sister airline, Air Asia, now operates in 45 Southeast Asian
destinations and is expected to have an overall capacity of 37,000
aircraft seats within the next five years or about 10,000 seats
more than the combined capacity of Jetstar and Virgin.
Sadubin told the Daily Telegraph in Sydney that AirAsia X would be
interesting because it would provide a single class service and be
able to “cram 396 seats in a A330 aircraft” gaining about 18% more
seats that way.
AirAsia X will
be ‘price leader’
Sadubin believes AirAsia X will provide the opportunity for cheap
long haul travel for Australians in the short to medium term and
“will be the price leader to Southeast Asia, followed closely by
Jetstar”.
Aviation analysts are going to have a fascinating time watching
the unfolding battle of the skies especially since both Singapore
Airlines and Qantas have been among the most successful global
airlines in recent years.
“The next two years may well define Australian aviation as we have
come to know it,” Joyce recently told a luncheon address of the
National Aviation Press Club in Sydney.
In the same speech, he quoted Tiger’s Tony Davis as saying
Australian carriers could not compete with rivals from Southeast
Asia because of their higher cost structure.
“It (Jetstar) could never match the low labour costs available to
Asian carriers,” Davis was quoted as saying.
Joyce appears supremely confident he can take on the challenge,
noting that Jetstar’s cost base was 15% below Virgin and
questioning how long it might take before Tiger could announce its
maiden pre-tax profit.
Jetstar is also building up its Southeast Asian presence through
its Singapore-based Jetstar Asia and a 30% stake in Vietnam’s
Pacific Airlines.
It presently has twice weekly flights from Sydney and Melbourne to
Bali, a popular Australian destination.
This goes up to four a week from Sydney late in October and the
airline expects the first of 15 new B787s to join the fleet in
August next year.
Even before the competition arrives Australian travellers are
finding some great bargain packages.
Jetstar has a one-way fare from Sydney to Osaka for A$299, about
one fourth of the cost of flying to Port Moresby, and a mere A$199
to fly from Cairns to Nagoya in Japan.
How about a 14-day holiday in the Thai seaside resort of Phuket
for A$1,403, inclusive of airfare and accommodation or A$1,344 for
airfare and seven nights accommodation in Ho Chi Minh City in
Vietnam?
But Qantas itself has a seven-day Fiji holiday at a five-star
hotel for a mere A$1,132 ex-Sydney.
And this is before the real competition has arrived.
 
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