Qantas is proposing to expand its low-cost domestic carrier Jetstar into international markets in a move that is expected to result in conflict with the mainline carrier’s pilot unions.
Qantas chief executive Geoff Dixon told an investment conference recently that Qantas is developing a proposal for a two-class, value-based international Jetstar that would serve primarily leisure-based markets.
The mainline carrier has been pleased with the performance of Jetstar, which it launched in May 2004, and earlier this year said it was looking to deploy the low-cost model in markets elsewhere. Qantas already has a 49.9% share in Singapore-based Jetstar Asia.
Jetstar says there are growth opportunities for the low-cost carrier on the broader international stage and that Jetstar management feels the carrier is in a positionto deliver, but it is subject to board approval whether the plan proceeds.
The proposal is expected to be discussed at Qantas’s next board meeting on 7 December. At that meeting Qantas management is also due to put forward its proposal for new long-haul aircraft for the mainline carrier.
The proposal is also expected to include aircraft for an international arm of Jetstar, which currently operates Airbus A320s.
Qantas’s pilot unions have already expressed concern regarding the proposal, with suggestions that an international Jetstar would take over under-performing Qantas routes to South-East Asia, China and Japan.
Where an international low-cost carrier would fit with Qantas’s existing leisure-based carrier Australian Airlines is not known. Dixon said recently that Australian Airlines is “certainly viable for the future”, despite the carrier failing to meet expectations.
Jetstar will make its first foray into the international market in December when it launches New Zealand services. The carrier will have two A320s based in Christchurch, operating to Sydney, Melbourne, Brisbane and the Gold Coast.
Source: Flight International
