Jetstar to redefine Australian aviation
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South Pacific,
Jetstar
(CAPA) Jetstar claims that the next 12 months may well redefine Australian aviation as we have come to know it, with a period of expansionary plans and changes in the competitive environment increasing in the second half of 2007 and into 2008.
Competitive change is headed by new entry into the Australian market, namely by Tiger Airways and AirAsia Long Haul. However, despite taking the competition “very seriously”, Jetstar believes it can maintain the lowest cost operations. Jetstar CEO, Alan Joyce, stated its cost position on a like-to-like basis is up to “15% better than Virgin Blue”, and its operations more sustainable than Tiger Airways, whose “operations have and continue to lose money – over SGD60 million (AUD46.5 million) in two years – and at a greater rate than Jetstar Asia”.
Jetstar also asserted that, as Australia’s low fare airline, it “won’t be beaten” on price. However, despite this, the airline claims it “will not purse the almost zealot like approach of some European LCC’s, where the aspiration of offering low to zero fares will be supported by aggressive ancillary revenue intakes”. Having said that, Jetstar is increasingly looking to ancillary revenues to provide a platform to keep fares low, aiming to derive 10% of total revenues from ancillary activities during the 2008 financial year.
Jetstar also plans considerable capacity expansion within the next three years, aiming to become ten times its initial size by ASKs. Jetstar has already grown over three fold since operations commenced three years ago. Much of this growth will occur internationally, with the airline aiming to have 70% of operations dedicated to international markets by 2011. As the first in the Qantas Group to receive the B787 Dreamliner (15 in total), it will become the Group's “international growth vehicle”.
Date posted: 06-Jun-07.
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Jetstar to redefine Australian aviation 
