Jetstar to enter Tasman dogfight

By Steve Creedy

03aug05

JETSTAR will announce its assault on the cut-throat trans-Tasman market today with $139 one-way fares designed to undercut low-cost rivals Pacific Blue and Air New Zealand`s Freedom Air.

The Qantas low-cost unit`s first foray overseas will also see it replace Qantas mainline flights from Brisbane and Melbourne to Christchurch from December 1.

The decision mirrors moves to replace higher-cost Qantas services with Jetstar flights in marginal domestic markets as part of a segmentation strategy.

Qantas has also refused to rule out using its all-economy Australian Airlines subsidiary on low-yielding routes. A new enterprise agreement with Australian`s flight attendants allows the Cairns-based subsidiary to use new aircraft, hire foreign crews and fly further.

Jetstar`s overseas expansion will add 1500 seats a week to the Qantas Group`s existing trans-Tasman services, in a market that has been described as a bloodbath and prompted accusations of capacity dumping against Dubai-based Emirates.

Jetstar will launch to Christchurch with 10 services a week from Sydney, nine from Melbourne, seven from Brisbane and two from the Gold Coast.

The low-cost carrier will replace daily Qantas 737 services from Melbourne and Brisbane, but Qantas will continue to fly two-class 767s from Sydney.

Qantas said it would operate nine 767 services during the peak school holiday period and move to a daily service from February.

``Qantas will continue to provide the majority of Qantas Group capacity on the Tasman - including new year-round weekly services between Sydney and Queenstown from October 1 - but customers now also have the option of a lower-cost alternative to the predominantly leisure market of Christchurch,`` Qantas executive general manager John Borghetti said.

Jetstar spokesman Simon Westaway said the new services represented about a 14 per cent increase in the Qantas Group`s capacity to Christchurch.

He said the decision to head overseas was a significant one and a logical next step.

``Obviously this had been some time coming ... and we are anticipating a strong competitive reaction,`` he said.

``For some time we`ve thought there was some scope for us to do international services and we`re going to launch a very cost-competitive brand on the trans-Tasman.

``It will complement the Qantas presence and grow the overall market.``

Jetstar will switch to assigned seating for its new international route but said it had no intention of changing its free seating model in Australia.

It is looking at expanding its portable digital entertainment offering on the route and expanding food and drink menus.

Passengers will also be able to pick a seat on the aircraft at the time of booking.

``The reason we`ve gone for allocated seating is partly due to international trends but also because we don`t have the same pressure on turn times as we do on the domestic operation,`` Mr Westaway said.