Virgin Blue is set to become the second new airline in Australia in the space of two months.
The Brisbane-based division of the Virgin Group plans to begin Brisbane-Sydney flights on 3 August, following the 5 June launch of Sydney-Melbourne service by Impulse Airlines. Both start-ups are challenging Qantas Airways and Ansett Airlines, which have dominated Australia's skies for decades.
The new carriers are starting on the country's two busiest routes. Over the coming months they plan to add flights as more aircraft arrive, so that they can operate at least seven flights a day on the busy Sydney-Melbourne-Brisbane triangle. Impulse is flying Boeing 717s, and Virgin will use 737s.
In a second phase next year, each may add flights to cities such as Adelaide, Hobart, Canberra and Cairns. In Impulse's case, that could involve replacing turboprops it already uses on some of these routes.
Low fares offered by the newcomers with few or no restrictions are likely to put pressure on Qantas and Ansett, which have vowed to match their new rivals. But unlike the incumbents, Virgin Blue and Impulse are offering only one class of service, with no free meals or most other amenities.
Qantas has said it may consider launching a low-cost unit of its own. A defiant Ansett says the start-ups will not force it to change the way it does business. Impulse has already complained twice to the Australian Competition and Consumer Commission (ACCC) about alleged predatory conduct by Qantas.
Both new entrants forecast their own growth at rates below the market's overall growth. Yet Impulse chief executive Gerry McGowan claims he has seen "a pent-up demand for affordable travel, and a pent-up anger at the way business [travel] has been treated by Qantas and Ansett".
Virgin and Impulse are Australia's first new airlines since the collapse of short-lived Compass II in 1993.
Source: Airline Business
