CAPA: Big week for Australian aviation

This is a big week for airline capacity announcements to, from and within Australia, according to the Centre for Asia-Pacific Aviation.AirAsia X is likely to announce Avalon Airport near Melbourne as its first long-haul destination from Kuala Lumpur, with services likely to commence in Oct-07, subject to regulatory approval. Jetstar, pre-empting the launch, confirmined services to KL from Sydney would commence on 09-Sep-07.

Both developments are likely to spark new outbound travel by Australians from the Southern states to Asia, taking advantage of AirAsia’s extensive budget network.

Jetstar is also on the cusp of a major order for A320s - potentially 100 or more for delivery after 2009 - to fuel its long-term expansion in Australia and Asia, including Vietnam’s Pacific Airlines, which is to be brought under the Jetstar brand from mid-2008. Jetstar has also moved to boost capacity from Newcastle, considered a front-runner for a Tiger Airways base in New South Wales.

Virgin Blue meanwhile has gained approval from Australian authorities to launch ten times weekly service to the US from Nov-07 - by which time Qantas will have rolled out its new Premium Economy cabin on several of B747-400s and new A380 equipment.

Qantas’ Premium Economy section will displace standard economy seats, in line with the group’s two-brand strategy, to position it at the premium-end of the spectrum, leaving Jetstar to handle the budget end with its appropriate cost structure.

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India’s Kingfisher Airlines recently announced its A380s would be “flying palaces” with a meagre 525 seats (against Airbus’ baseline 555-seat configuration specification for the aircraft). But Qantas plans just 450 seats (14 in First, 72 in Business, 32 in its new Premium Economy cabin and 332 in Economy) in its A380s - down from a previously disclosed configuration totaling 501 seats.

The A380 is fast becoming a “less-is-more” battle, with Air France’s 540-seat configuration (nine First, 80 Business and 451 Economy seats) slashed by Emirates to 489 seats on long-haul routes (Emirates has three different configurations planned for its 55 A380s on order), and reduced further by Singapore Airlines with its 480-seat layout.

Qantas is giving up a significant seat unit cost advantage to its rivals, but is betting on its its new inflight product (and a fast-rising alternative in the minds of Australian travelers - ie Jetstar) to help it drive a yield premium that offsets fewer seats.
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