New Quantas low-fare carrier Jetstar takes to the skies

Qantas signaled the beginning of an aggressive discounting campaign against Virgin Blue as its low-cost “baby” Jetstar made its debut in the Australian market with the lowest fares ever seen on domestic routes. The Melbourne-based airline-within-an-airline took off Tuesday with 717-200 flights to 13 destinations on the eastern seaboard, including Sydney, Brisbane and Melbourne. It will operate 88 flights a day, increasing to 116 by Aug. as it takes delivery of the first of 23 A320s.

To mark its launch, Jetstar is offering 100,000 seats at a special introductory fare of A$29 ($20). Qantas CEO Geoff Dixon said the LCC will market regular fares at below A$100 between Sydney and Melbourne, the benchmark route in the domestic market. About 90% of its sales will be conducted online.

“I would have thought, as everything settles down, and I mean this over the next two years maybe, Jetstar could end up with around 20% of the market,” Dixon said. “I think they’ll get most of the growth in the lower end of the market. I think Virgin certainly still stay around about 30%-35% and I think Qantas itself will probably end up with about 45%-50%.”

Qantas also has plans to establish a low-cost venture in Singapore known as Jetstar Asia that intends to order A320s, this website revealed Monday (ATWOnline, May 24). Another subsidiary, Australian Airlines, serves international sectors with a full-service offering.
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