May 29, 2007

Air wars: taking tiger by tail

QANTAS offshoot Jetstar yesterday fired its first shot for control of the budget travel market by offering a new bonus system to undercut Virgin Blue and soon-to-launch Tiger Airways.

The strategy is based on rewarding loyal Jetstar passengers with vouchers which they can use to offset the cost of future travel.

Under the new arrangement, customers can claim double the difference between the cost of competing fares if they are offered an online fare lower than Jetstar's fare.

Both flights must be on the same day and take off within an hour of the other.

The new reward plan is among a raft of major changes aimed at improving Jetstar's 15 per cent share of domestic travel.

The new strategy, which was outlined to the market last week by Qantas chief executive Geoff Dixon, also involves plans to add a frequent flyer program to Jetstar services next year.

Jetstar's recently introduced long-haul operations to Bali, Thailand and Hawaii are also to be upgraded with extra new-generation Boeing aircraft.

The airline will now get 15 next-generation Boeing 787 Dreamliners, up from the original order of 12 planes.

They will replace Jetstar's existing fleet of former Qantas A300 jets.

The first of the new 300-seat Boeings is due to enter service in October next year.

Addressing a tourism conference in Brisbane yesterday with Qantas executives, Jetstar chief executive Alan Joyce said the double-the-difference program would enshrine Jetstar's commitment to "low fare leadership".

Mr Joyce said Jetstar had offered the lowest domestic fares for three years and was acknowledging this now with Jetstar travel vouchers.

Qantas also outlined plans to upgrade its international and domestic operations.

This August, when Tiger Airways begins services, Qantas will add more than 500 seats a week to flights operating on the Brisbane-Perth route.

Rob Gurney, Qantas group general manager sales and distribution, told the same conference that three extra Boeing 737-800 jets would be placed on the Brisbane-Perth roster.

The new arrangement would give travellers two early morning departures, an early afternoon service and an early evening flight.

Visitors would have the opportunity to fly out of Perth at 5.20pm after day trips to Rottnest Island or Margaret River, Mr Gurney said.

Qantas's long-haul division also has plans to upgrade and add new services, with extra flights to Shanghai, Los Angeles and South Africa.

The flying kangaroo will also make a return to South America, with direct services between Sydney and the Chilean capital, Santiago, due to start in November.

Qantas abandoned what was then a loss-making service to South America several years ago.

Mr Gurney said supplementary services would operate to Beijing to coincide with the 2008 Olympics.

Under its new schedule, Qantas will add an extra service between Sydney and Shanghai from August, which will make five flights a week.

Two extra services from Brisbane to Los Angeles and one from Sydney to Los Angeles will operate from next March, making 43 flights a week to the US mainland.

And an extra weekly service will operate between Sydney and Johannesburg from November next year.

By Geoff Easdown
Source: Herald Sun

No comments: