Qantas names Low Cost Carrier Jetstar and Orders Airbus A320s

Qantas announced earlier today that its new low cost domestic airline would be called Jetstar.

The Chief Executive Officer of Qantas, Geoff Dixon, said the airline would use new Airbus A320 aircraft from June next year and would eventually have an all A320 fleet. 

"Jetstar will fly new A320 aircraft featuring 177 leather seats and an inflight audio entertainment system," Mr Dixon said.

"The domestic leisure market is growing rapidly and now represents over 60 per cent of all passengers. Jetstar will concentrate on growing this market with value fares while opening up new destinations."

Mr Dixon said the Qantas Board had last week approved a number of initiatives for Qantas' domestic operations, including the:

- selection of Impulse Airlines as the operating entity for the low cost carrier;

- placement of an initial order for 23 A320s for the low cost carrier;

- reorganisation of the full service Qantas domestic airline into a two-class jet operation on all services, using only two aircraft types - Boeing 737s and 767s; and

- acquisition of an additional five Boeing 737-800 aircraft for the full service domestic airline to replace the airline's last 737-300s and further modernise the fleet.

Mr Dixon said using Impulse as the operating entity and with new aircraft, new slimline seats, a new booking system and innovative products, Qantas was confident Jetstar would be the lowest cost operator in Australia.

The start-up of Jetstar would add to the overall strength of the Qantas flying product, which currently comprises of:

- Qantas International, offering 540 services each week to 77 destinations in 33 countries;

- Australian Airlines, the full service international leisure carrier, offering 50 flights each week to 11 destinations in six countries;

- Qantas Domestic, offering more than 2,500 flights each week; and

- QantasLink, the regional airline, offering more than 2,500 flights each week.

Mr Dixon said the purchase of the A320s and 737-800s would not stress the company's balance sheet.

"We will remain within our desired gearing level," he said. "The domestic market is strong and the international market is returning quickly from the effects of SARS and the war in Iraq. All our businesses are profitable."

Jetstar will begin selling seats in February 2004 and start flying in May 2004, using 14 Boeing 717s currently operated by Impulse Airlines under the QantasLink brand. The first Airbus A320 will be delivered in June 2004 and Jetstar will, over time, move to an all A320 fleet.

"While the initial order is for 23 A320s, we can acquire more of these aircraft as Jetstar grows. As we said in October, Jetstar will operate a minimum of 23 aircraft by mid 2005.

"The A320 family is used by two of the world's most successful low cost carriers, Jetblue and EasyJet, and it has an outstanding track record, including excellent fuel efficiency."

Qantas said that the airline's route network and fare structure will be announced in January 2004.

Mr Dixon said the Board's approval for the acquisition of an additional five Boeing 737-800s highlighted the full service airline's strategy of simplifying its fleet to include only two aircraft types - Boeing 737s and 767s.

The new 737-800s, to be delivered next year, will replace the airline's last 737-300s. The 737-800 is more fuel efficient and cost effective than the 737-300 and it offers more spacious cabins, more headroom and larger windows.

"Qantas has taken delivery of 20 737-800s since February 2002 and another three of these aircraft will join the fleet by the middle of next year," Mr Dixon said.

"The additional five aircraft approved by the Board will take the total Qantas 737-800 fleet to 28. This will result in a large, uniform and more modern fleet for the full service airline and this will deliver further improvements to utilisation, reliability and on-time performance."

Mr Dixon said the full service Qantas domestic airline would continue to offer award-winning inflight entertainment - including video news, movies, sitcoms and sport shows as well as up to 10 channels of audio programs - and the popular Frequent Flyer program.

Mr Dixon said Qantas would maintain its ongoing investment in domestic products, both in the air and on the ground, including the extensive network of Qantas Club lounges.