Low cost carrier Jetstar to operate to Europe

Jetstar chief Alan Joyce told BusinessDaily yesterday that new services to Athens and Rome via Bangkok could begin operating as early as 2009.

He said a European operation aimed at winning traffic from Australia’s large Italian and Greek communities would follow once Jetstar had bedded in its longhaul Asian operation launched in November.

Pressed on the likely fare structure, Mr Joyce said: “the launch fares could be as attractive as $199 on each sector based on what we have done in the past.

“The standard fares that we are offering to Bangkok on an ongoing basis are around $399 and that could be the same on the next leg,” Mr Joyce said, indicating that travellers would probably pay upwards of $798 to fly to either one of the two European capitals.

Jouce said that the average price of a one way Qantas economy ticket to Europe is about $1600, saying, “There will be lots of specials and it will be very attractive to fly at certain times of the year,” adding “look at our fares to Bangkok and make your own interpretation.”

“Bangkok’s nearly half the distance to Europe”.

But discount tickets to Europe are just one aspect of a much broader growth strategy Qantas has for Jetstar.  The plan is to use the discount offshoot on routes where the parent airline cannot generate profits.

Athens and Rome are prime examples where Qantas once flew but withdrew for economic reasons.  Other new routes now being contemplated include Malaysia, South Korea, India and China.

Mr Joyce said opportunities would also arise within five years for the airline to fly to the US west coast to places such as Oakland in California instead of San Fransciso.

Opportunities also exist in Japan but traffic growth was being affected by high exchange rates.  He added that the Chinese and Indian markets were the real growth regions in the medium term.

Rather than compete with Qantas, Jetstar’s long-haul services to China and India would possibly operate from Adelaide and Brisbane, rather than Sydney and Melbourne.

The airline chief said the overseas growth strategy was based largely around the new generation Boeing 787-8 aircraft of which Jetstar is getting 15, which will begin to enter service in August 2008.

Jetstar has also ordered nine extra A320s which will be used within Australia and it is also looking at buying more A320s from 2009.

“The stats show that in 2009-10 we will be 10 times as big as we were when we started in 2004.”

Later, in an address to the Aviation Press Club, Mr Joyce said: “Jetstar is preparing for one of our most challenging, but also exciting periods in respect to expansionary plans and the competitive environment.

“The next two years may well redefine Australian aviation as we have come to know it.”

He argued that Jetstar and Qantas needed a flexible industrial relations system to cope with change in the aviation business and airlines had to hire staff on Australian Workplace Agreements.

“Jetstar will require a minimum 250 more pilots and engineers in the next two years, on conditions including terms and pay that will broadly mirror our current enterprise agreements.”

Report by The Mole and BusinessDaily