The war in the aviation sky begins
Qantas has taken its first step in the impending war in the skies over Australia, ultimately created by the entry of Singapore based Tiger Airways’ entry into the domestic Australian market, by announcing the addition of nine leased Airbus A320’s to Jetstar’s short haul A320 fleet, the biggest expansion since the Qantas owned LCC was launched three years ago.
As highlighted in TravelMole some time ago this is considered by analysts to be the first step in the growth of Jetstar and its taking over of all Qantas’ legacy carrier based less profitable routes, handing then over to Jetstar, which is considered ultimately to become a much bigger airline than Qantas.
Peter Gregg, Qantas CFO told the Herald, “The basis of all of this is to protect our 65% market share”.
With three of the aircraft coming from troubled Qantas part owned Jetstar Asia, the order increases Jetstar’s short-haul fleet from 24 to 33 within the next two years, with the other six coming from leading international aircraft lease specialists ILFC.
Some analysts have said that suggested Qantas is exploiting the record demand for domestic air travel, Peter Gregg says that the move is primarily designed to counter Tiger’s entry and Virgin Blue’s expansion plans.
With Peter Gregg only six weeks ago talking down the entry of Tiger, he has sending out mixed messages in relation to the threat posed by Tiger, with Qantas also having downgraded its strong profit outlook as a result of the “negative financial impact” of Tiger Airways’ entry into Australia.
He also told The Herald, “At the end of the day we have the lowest-cost airline in the domestic market and we have the best-yielding airline in the market, being Qantas.”
Tiger CEO, Tony Davis said, “I think it’s clear that we’re forcing our competitors into unscheduled and unplanned aircraft acquisitions.”
Centre for Asia Pacific Aviation’s Peter Harbison said yesterday’s fleet order represented a “massive shift” and on top of Tiger’s entry and Virgin Blue’s plans to add five 737s to its fleet, said the Qantas order was expected to boost domestic capacity by 20%, adding, “There will be some very, very attractive pricing to encourage more people to fly.”
A Report by The Mole
John Alwyn-Jones
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