Qantas to Launch Low Cost Airline

Qantas said today it would launch a new low cost domestic airline in May 2004.

The Qantas Board approved the establishment of the new airline at a meeting in Adelaide yesterday.

The Chief Executive Officer and Managing Director of Qantas, Geoff Dixon, said the new airline would be a separate business with its own brand.

He said it would be established using the operation of the former low cost carrier, Impulse, which was acquired by Qantas in May 2001 or by using a new "greenfields" company. A decision on which option would be used would be made within six weeks.

"This will be a true low cost carrier - lean, highly competitive and with the standards of safety and reliability associated with Qantas," Mr Dixon said.

He said it would further enhance the flying services operated by the Qantas Group, namely:

· the main Qantas domestic and international airline;

· QantasLink, the regional airline operations; and

· Australian Airlines, Qantas' international leisure carrier.

"Together, these airlines will offer a comprehensive range of services for travellers and see Qantas boost its role as a major supporter of the Australian tourism industry," Mr Dixon said.

"Negotiations are underway with Boeing, Airbus and aircraft lessors for the acquisition of 737-800 or A320 aircraft that will see the new low cost carrier have a minimum of 23 aircraft by mid-2005."

Mr Dixon said the current Qantas domestic operation would continue as now, but with an even greater focus on delivering quality service, particularly to the business community.

"Our network offering will be enhanced and additional investment made in both in-flight and on-ground product," he said.

Mr Dixon said that Alan Joyce, 37, had been appointed Executive General Manager of the low cost carrier.

"Alan joined Qantas in 2001 and he has an extensive airline industry background, having worked with both Aer Lingus and Ansett," he said.

"His experience is principally in fleet and network planning and business improvement and he was actively involved in Aer Lingus' low cost strategy."

Mr Dixon said a small team, including a number of former senior executives from the very successful European low cost carrier Ryanair, would assist Alan to establish the new airline.

He said the new airline would select the location of its headquarters, which would not be in Sydney, within the next six weeks.

Melbourne advertising agency, Dewey and Horten, had been engaged to work with the new airline's executives on naming, branding and advertising.