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FORMED IN 1992. FORMERLY KNOWN AS "OXLEY AIRLINES." LOW COST "NO FRILLS" DOMESTIC, PASSENGER, JET AIRPLANE SERVICES.
473 BOURKE STREET
MELBOURNE, VICTORIA, AUSTRALIA
AUSTRALIA (COMMONWEALTH OF AUSTRALIA) WAS ESTABLISHED IN 1901, IT COVERS AN AREA OF 7,686,848 SQ KM, ITS POPULATION IS 17.9 MILLION, ITS CAPITAL CITY IS CANBERRA, AND ITS OFFICIAL LANGUAGE IS ENGLISH.
APRIL 2000: GERRY MCGOWAN, FOUNDER, EXECUTIVE CHAIRMAN, EX-TNT (TNB) EXECUTIVE.
112 EMPLOYEES (INCLUDING 105 FLIGHT CREW (FC), & 27 MAINTENANCE TECHNICIANS (MT)).
(http://www.impulseairlines.com). SITA: SYDOPVQ.
HUBS: NEWCASTLE, AND TAMWORTH.
717'S WILL FLY SYDNEY, MELBOURNE, BRISBANE, AND PERTH, WHICH ACCOUNTS FOR 38% OF DOMESTIC MARKET. 2ND HUB AT CANBERRA, WHERE IT INTENDS TO DEVELOP A NEW, HEAVY JET, MAINTENANCE FACILITY, FLIGHT TRAINING CENTER, AND RESERVATIONS CALL CENTER.
3 ORDERS (APRIL 2000) 717-200'S, BAVARIA (BAV) LEASED, & 2 ORDERS 717-200'S, PEMBROKE (PEB) LEASED, 117Y PAX. 717-200'S EQUIPPED WITH LONG RANGE TANKS, FOR OPERATIONS TO PERTH. 1ST 717'S IN AUSTRALIA.
JUNE 2000: 1ST TRUNK ROUTE JET SERVICE, MELBOURNE TO SYDNEY ON 717, CARRIED 54 PASSENGERS (PAX).
JULY 2000: WILL RECEIVE $20 MILLION INVESTMENT, FROM MOTOR TRADES ASSOCIATION OF AUSTRALIA SUPERANN FUND FOR EXPANSION PURPOSES.
NOW SELLING 25% TICKETS ON-LINE. PASSENGER (PAX) FIGURES +16% SINCE INTRODUCTION OF JET SERVICE.
FISCAL YEAR (FY) 1999 = 104 MILLION (RPK) TRAFFIC; 50.5% LF LOAD FACTOR; 199,000 PASSENGERS (PAX) (+32.6%).
1 BEECH 1900D DELIVERY.
AUGUST 2000: PLANS A$9 MILLION, 4,800 SQ M, HEAVY MAINTENANCE/ENGINEERING TRAINING FACILITY AT CANBERRA TO OPEN 1ST QUARTER 2001 TO HANDLE 717 MAINTENANCE. THE HANGAR IS TO HOUSE 2 737-800'S, OR 1 767.
2 717-200'S (55062; 55063) PEMBROKE (PEB) LEASED.
SEPTEMBER 2000: SYDNEY - TAREE, NEW SOUTH WALES (BEECH 1900D). SYDNEY - BRISBANE (717-200, 4/DAY).
FISCAL YEAR (FY) 1999 = +$256 MILLION (NET PROFIT).
OCTOBER 2000: REPORTS ITS 1ST PROFIT AFTER 4 MONTHS OF JET OPERATIONS. CONSIDERING +10% FUEL SURCHARGE ON ALL FARES, SINCE FUEL COSTS HAVE MORE THAN TRIPLED IN LAST YEAR. NEW AIRPLANES TO BE USED ON MELBOURNE TO BRISBANE.
+3 ORDERS 717-200'S (55001; 55002; 55151).
NOVEMBER 2000: NEW AIRPLANE LIVERY, WITH A LOGO, FEATURING AN AUSTRALIAN BIRD, THE SULPHUR CRESTED COCKATOO.
717-200 (55001, VH-VQA) DELIVERY.
DECEMBER 2000: PLANS TO OPEN A MAINTENANCE FACILITY IN CANBERRA.
REPORTED 80% LF LOAD FACTOR ON SYDNEY - MELBOURNE, & 75% ON SYDNEY - BRISBANE.
2 717-2CM'S (55002, VH-VQB; 55151, VH-VQC), DELIVERIES. +2 ORDERS (MARCH 2001) 717-200'S, TO BE USED FOR CANBERRA - SYDNEY.
FEBRUARY 2001: NEWCASTLE - CANBERRA/TAMWORTH (BEECH 1900, 8/DAY). EXTENDS DAILY MELBOURNE - SYDNEY TO NEWCASTLE (717).
717-200 (BR715C) (55001, VH-VQA) DELIVERY.
MARCH 2001: IN APRIL 2001, MELBOURNE - HOBART, TASMANIA (717-200).
APRIL 2001: 250 EMPLOYEES.
JIM LINK, EX-RAYTHEON BEECH, CEO.
+2 ORDERS (SEPTEMBER 2001) 717-200, LEASED.
MAY 2001: AIRLINE IS TAKEN OVER BY QANTAS (QAN) WHEN (IMU) INSTITUTIONAL INVESTORS, WHO OWN 60% (AMP ASSET MANAGEMENT, NATIONAL ASSET MANAGEMENT, ARABIAN GULF INVESTMENTS, & GIC SPECIAL INVESTMENTS OF SINGAPORE) WITHDREW THEIR SUPPORT. (QAN) LENDS (IMU) THE FUNDS TO BUY OUT THESE SHAREHOLDERS, LEAVING GERRY MCGOWEN AS THE SOLE SHAREHOLDER. (QAN) LIVERY WILL BE PUT ON 8 717'S, & 13 BEECHCRAFT 1900D AIRPLANES. (IMU) WILL CEASE FLYING ON MAJOR TRUNK ROUTES, SYDNEY - MELBOURNE, & SYDNEY - BRISBANE, AND FOCUS ON REGIONAL AND LEISURE ROUTES, MAINLY ON THE GOLD COAST, MAROOCHYDORE, HAMILTON ISLAND, AND MELBOURNE - HOBART (TASMANIA). THE BEECH 1900D'S WILL CONTINUE FLYING SYDNEY - CANBERRA, & NEWCASTLE AND WILL INTRODUCE NEW (QAN) ROUTES. THE COMMERCIAL AGREEMENT WILL BE SIMILAR TO THE ONE BETWEEN (QAN) AND NATIONAL JET SYSTEM (NJS), UNDER WHICH AIRPLANES ARE LEASED TO (QAN).
JULY 2001: SYDNEY TO HAMILTON ISLAND. MELBOURNE TO MAROOCHYDORE.
OCTOBER 2001: QANTASLINK/(IMU), MELBOURNE/SYDNEY - LAUNCESTON/HOBART. THE "IMPULSE AIRLINES" IDENTITY HAS NOW DISAPPEARED INTO "QANTASLINK" THE NEW BRAND NAME, FOR ALL OF (QAN)'S REGIONAL AFFILIATES.
POSSIBLE +7 ORDERS TO EXISTING 8 717'S.
DECEMBER 2001: QANTAS (QAN) APPOINTS BEVAN COOTE, GENERAL MANAGER.
(QAN) SHOWS INTEREST IN +8 717'S.
APRIL 2002: TO ADD +6 717'S BETWEEN 2005 TO 2006 FOR TOTAL 14. WILL INTRODUCE NONSTOP SYDNEY TO ROCKHAMPTON, PROSPERINE, MACKAY, AND TOWNSVILLE, MELBOURNE TO MAROOCHYDORE, ADELAIDE TO COOLANGATTA, AND HOBART TO COOLANGATTA. WILL ESTABLISH A BASE IN HOBART FOR 717 OPERATIONS LATER IN 2002.
MAIN BASE: SYDNEY (KINGSFORD SMITH INTERNATIONAL) AIRPORT (SYD).
HUBS: TAMWORTH AIRPORT (TMW); NEWCASTLE (WILLIAMTOWN) AIRPORT (NTL).
May 2002: 717-231 (55092, VH-VQF), ex-(TWA), (PEB) leased.
June 2002: Melbourne to Maroochydore.
July 2002: Retires last of Beech 1900D's. Awarded 5-year governmental, air service contracts for 7 regulated routes, that it currently serves: Longreach, Barcaldine, Blackall, Roma, Charleville, Weipa, and Horn Island. Sydney to Proserpine, Mackay, and Rockhampton.
September 2002: Will base its 717 fleet at the former Ansett (ANS) terminal at Sydney, taking up 6 of the 18 gates available for its (Y)-economy service, which is expected to cater to 2 million passengers annually.
October 2002: John Gissing, Manager Flight Operations.
"2C" check completed on 717-200 (VH-VQF). Configuration changed from 102Y to 115Y.
December 2003: In May 2004, the former "Impulse Airlines" (IMU) will initiate "JetStar Airways" (IMU) low-cost operations for Qantas (QAN).
Raytheon Beech 1900D (UE-117, VH-NTL) sold to National Airways Corporation.
February 2004: When Jetstar Airways (IMU) begins operations in May 2004, it will offer "buy on board" meals catered by "Gate Gourmet." Since its website opened in December 2003, has had >20,000 job applications, including 110 pilots (FC); 2,255 cabin crew (CA); & 1,434 maintenance engineers (MT).
(IMU) will gradually replace the initial 717 operations with 20 orders A320's + 3 leased airplanes. In June 2004, plans 42 flights/week, Avalon - Sydney; 28 flights/week, Avalon - Brisbane; & 246 flights/week, Melbourne Tullamarine Airport to 6 other destinations.
March 2004: JetStar Airways (IMU) sold 60,000 seats in 1st 10 hours of taking reservations for service starting in May 2004.
Will paint 13 717's all white in preparation for the launch of (IMU). The 14th will be painted in (IMU) colors by the end of April 2004. All 717's configurations will be changed to 125Y for the May 2004 launch date.
May 2004: 1st 717-200 (VH-VQI) painted in JetStar Airways (IMU) livery with metallic silver fuselage, and the (IMU) five-point star in orange on its tail, designed to represent the smallest star of the Southern Cross, "Epsilon Crucis."
July 2004: Jetstar Airways (IMU) has become profitable in only its first 2 months of operations. Has carried 500,000 passengers and has boosted capacity to tourism centers in Queensland and Tasmania by >30%. In May 2004, on-time performance was 93%. (IMU) does not offer commissions to travel agents and has sold 90% of its fares online.
1st 2 A320-232 (2169, VH-JQG) deliveries.
August 2004: In December 2004, Launceston - Brisbane (daily).
Its strict and controversial policy of check-in closure 30 minutes before departure, has resulted in JetStar Airways (IMU) recording the best on-time performance of any Australian airline for June 2004 (92.5% departures & 94.5% arrivals on-time).
September 2004: Selects Teledyne's Wireless GroundLink for recording and transmission of flight data info from 20 A320's.
After it has completed its transition from its 14 717's to its 23 A320's within the next 2 years, it may extend services to short-haul international destinations in the Asia/Pacific. It was emphasized that Jetstar Airways (IMU) would not compete with Qantas (QAN)'s international low-cost subsidiary, Australian Airlines (AUS).
November 2004: Now expects transition from 8 717's to A320's to be completed by June 2005. The 8 717's will go to National Jet Systems (NJS) arm of QantasLink to replace 8 of 10 B Ae 146's.
In February 2005, Adelaide - Gold Coast (Coolangatta), Hobart, & Melbourne (Avalon).
2 A320-232's (2322, 9V-VQX; 2292, 9V-VQZ), leased to JetStar Asia (JSA). A320-232 (2299, VH-VQY), delivery.
December 2004: 2 A320-232's (2329, VH-VQW; 2338, VH-VQV) deliveries.
January 2005: Launceston - Brisbane (daily), Newcastle - Brisbane (2/day).
6th A320 delivery.
June 2005: A320-232 (2475, VH-VQT; 2455, VH-VQU), deliveries.
August 2005: In December 2005, to Christchurch, and New Zealand to the Gold Coast. Christchurch - Sydney (A320, 10/week). Melbourne - Christchurch (9/week). Brisbane - Christchurch (daily).
2004 = 4.4 billion (RPK) passenger traffic; 6 billion (ASK) capacity; 72.4% LF load factor; 4.4 million passengers.
September 2005: 717-23S (55062, VH-VQD), withdrawn from use (WFU), and sent to National Jet Systems (NJS). 2 A320-232's (2515, VH-VQS; 2525, VH-VQR), deliveries.
October 2005: 3 A320-232 (2534, VH-VQQ; 2573, VH-VQP; 2587, VH-VQO), deliveries.
November 2005: Qantas Airways (QAN) is proposing to expand its low-cost domestic carrier Jetstar Airways (IMU) into international markets in a move that is expected to result in conflict with the mainline carrier’s pilot (FC) unions.
(QAN) CEO, Geoff Dixon told an investment conference recently that (QAN) is developing a proposal for a two-class, value-based international (IMU) that would serve primarily leisure-based markets.
The mainline carrier has been pleased with the performance of (IMU), which it launched in May 2004, and earlier this year said it was looking to deploy the low-cost model in markets elsewhere. (QAN) already has a 49.9% share in Singapore-based Jetstar Asia (JSA).
(IMU) says there are growth opportunities for the low-cost carrier on the broader international stage and that (IMU) management feels the carrier is in a position to deliver, but it is subject to board approval whether the plan proceeds.
The proposal is expected to be discussed at (QAN)’s next board meeting on 7 December. At that meeting, (QAN) management is also due to put forward its proposal for new long-haul airplanes for the mainline carrier.
The proposal is also expected to include airplanes for an international arm of (IMU), which currently operates A320s.
(QAN)'s pilot (FC) unions have already expressed concern regarding the proposal, with suggestions that an international Jetstar International (IMU) would take over under-performing (QAN) routes to South-East Asia, China and Japan.
Where an international low-cost carrier would fit with (QAN)’s existing leisure-based carrier Australian Airlines (AUS) is not known. Dixon said recently that (AUS) is “certainly viable for the future," despite the carrier failing to meet expectations.
(IMU) will make its first foray into the international market in December when it launches New Zealand services. The carrier will have two A320s based in Christchurch, operating to Sydney, Melbourne, Brisbane and the Gold Coast. (IMU) positioned its first A320 to Christchurch, with a second one arriving in order to launch trans Tasman service as follows to:
Brisbane from December 1st = 7 flights a week;
Gold Coast from December 3rd = 2 flights a week;
Melbourne from December 1st = 9 flights a week;
Sydney from December 1st = 10 flights a week.
(IMU) will inaugurate nonstop service from Adelaide to Whitesundays (Hamilton Island) on March 29th. The airline will operate 2 flights a week, on Wednesdays & Saturdays, using an A320.
(IMU) is in talks with Australia Post about selling its tickets over the counter at post offices in a move designed to expand its market reach in areas with limited Internet penetration such as rural communities. (IMU) currently conducts 90% of its business through the Internet and the remaining 10% through travel agents. Passengers would buy (IMU) tickets at post offices in the same manner they make bill payments to some 400 service providers, including gas and electric companies. The move mirrors sales tactics of Low Cost Carriers (LCC)s in Asia and Central and Eastern Europe.
2 A320-232's (2600, VH-VQN; 2587, VH-VQO), deliveries.
December 2005: In an interview with "ABC TV" in Australia, Qantas (QAN) CEO, Geoff Dixon said Jetstar International (IMU) eventually might grow to represent 20% of the company's flying, operating to destinations within 8 - 10 hours of Australia, "Reuters" reported. It is unclear what effect this would have on existing low-fare international brand Australian Airlines (AUS), which operates five 767-300s in 13 low-yield leisure markets. (QAN) recently announced that (AUS) will introduce a premium economy product in mid-2006 and is taking over the Cairns - Tokyo route next year.
(QAN) scrapped domestic and trans-tasman base commissions to travel agents in Australia and New Zealand and reduced payments on international sales from 7% to 5%, in a move designed to lower distribution costs and improve profit margins. The decision reflects global trends, increasing direct ticket sales - - particularly through the Internet - - and the growth of online-based low-cost subsidiary (IMU), according to (QAN). Base commissions on sales have been reduced steadily in recent years as the airline has refocused its business, with rates of only 1% on offer for domestic and Australia - New Zealand services.
(IMU), which recently announced plans to begin service on international routes, will commence those operations with a fleet of 4 A330-200s. They will be replaced with a fleet of 10 787s Dreamliners from August 2008, as part of a large order of Dreamliners placed by (QAN).
$8 billion, 45/20 orders (February 2008) 787-8 Dreamliners and expects to eventually take a total of 100 jets which would bring the order to $13 billion. The airplanes will be the first to be used by (IMU) internationally with a likely route: Sydney to Vancouver, BC, Canada. Another significant plus is it being the first airline seriously committed to buying the larger version of the 787-9, the "stretch" available in 2011. Also included are as many as 50 "purchase rights" bringing the potential order to 115 airplanes. Geoff Dixon, CEO said "the 787 won on price and fuel efficiency, plus being able to deliver in 2008."
A320-232 (2608, VH-VQM), delivery.
January 2006: Jetstar International (IMU) will inaugurate service from Melbourne to Perth on March 28th. (IMU) will operate one daily flight using an A320.
A320-232 (2651, VH-VQK), delivery.
February 2006: Qantas Airways (QAN) is considering acquiring a share of Indonesian budget carrier Adam Air (DHI) to strengthen its position in the high-growth Southeast Asia market. (DHI) CEO, Gunawan Suherman confirmed that (QAN) CEO, Geoff Dixon and CFO, Peter Gregg were in Jakarta to discuss the acquisition of 20% - 30% of the operation. According to Gunawan, (QAN) is planning to establish Jakarta as a second Asian hub after Singapore. (DHI) began flying in December 2002 with 737s and currently operates 20 airplanes to 39 destinations, including Malaysia and Singapore. (DHI) has flagged ambitions to triple its fleet over the next three years to 50 airplanes. (QAN) already owns 49% of Singapore-based (LCC) Jetstar Asia (JSA). Under Indonesian law, foreign carriers may buy up to 49% of domestic airlines.
Later, (QAN) executives had second thoughts about buying into Indonesia's (DHI) after one of (DHI)'s 737-300s was flown for 4 hours without any navigation and communications recently. According to the "Jakarta Post," the airplane lost the systems about 20 minutes after takeoff on a domestic flight and the pilot (FC) continued over the island of Java before landing on Sumba on an 1,800-m runway. The 737 was on a flight from Jakarta to Makassar on South Sulawesi. None of the 145 passengers was injured. (QAN) and (DHI) executives met 10 days ago to discuss a range of issues including equity and safety training. However, (QAN) said that no decision had been made about any acquisition. It was reported by Indonesian media that (QAN) may take up to 49% of the airline to establish a second hub for its Low-Cost Carrier (LCC) operations in Southeast Asia. Boeing (TBC) and Indonesian authorities are investigating the incident (INCDT).
Rising fuel costs and "aggressive competitor capacity increases" contributed to a -9.6% decline in (QAN)'s half-year profits to +A$352.6 million/+$261.3 million in the six months ended December 31 from +A$390.2 million in the year-ago period. The airline expects those difficult conditions to continue through the current semester, saying, "While further reforms in the business are underway, and coupled with the high fuel price, we do not expect to achieve the same levels of profitability in the current financial year."
(QAN) did see a +8.5% increase in revenue to A$6.85 billion, but costs grew faster, rising +10.8% to A$6.34 billion. Most expenses were comparable to the year-ago period save fuel, which soared +58% to A$1.35 billion. The carrier also incurred a one-time restructuring cost of A$69.6 million under its Sustainable Future Program (SFP). Operating profit narrowed -13.6% to +A$511 million.
"All our business transformation initiatives are now focused on enabling (QAN) to meet its future expenditure commitments and profit projections with a fuel cost above $60 a barrel," CEO Geoff Dixon said, adding that those efforts will make "job losses across various areas of the business . . . inevitable." He said job growth will occur "as our major investments grow the company." The airline said it cut -600 positions during the semester ended Dec 31.
(QAN) reported a consolidated passenger traffic increase of +4.3% to 45.79 billion (RPK)s. Capacity climbed +2.9% to 59.07 billion (ASK)s, raising load factor +1 point to 77.5% LF. Yield rose +5.4% to A10.87 cents. Cost per (ASK) increased +8.5%, but improved +5.7% excluding special items and fuel.
Looking ahead, (QAN) said it will focus on expanding (IMU) both at home and internationally, "large-scale investment" in more fuel-efficient airplanes and continuing to implement the (SFP), which is "on target" to achieve savings of -A$1.5 billion by the end of Fiscal Year (FY) 2006 and already has identified a further -A$1 billion in savings through cuts in distribution costs, restructuring of (QAN) Engineering into standalone Maintenance Repair & Overhaul (MRO) businesses, the sale of (QAN) Catering and other initiatives.
In conjunction with its financial results, the company announced a new executive structure effective February 20 "centered on a significantly smaller top team with broader responsibilities" and giving each of its businesses "the freedom to pursue independent business development initiatives, with accountability for the results." Reporting to Dixon will be seven executive General Managers organized into three groups: Flying businesses (QAN) and (IMU)), nonflying businesses and corporate support.
(IAE) will support (IMU)'s (V2500)s powering its A320s under a 10-year agreement that covers 20 A320 shipsets plus three spare engines. Fifteen of the airplanes covered by the agreement currently are in service.
(IMU), which was supposed to launch operations with 4 A330-200s from (QAN) until it takes delivery of its order of new 787s in late 2008 will now be getting 2 additional A330s, or 6 in total. (IMU) could be in operation by the end of this year. (IMU) will operate a mixed fleet of A330s and 787s until enough 787s arrive to allow the A330s to return to (QAN). (IMU) is also scheduled to take 787-900s from 2011 which could extend the range of its routes.
March 2006: The Qantas Group will make the following changes to its Darwin schedule May 1: Qantas (QAN) will operate a daily service to Brisbane and Jetstar (IMU) will fly six-times-weekly. The route to Adelaide will be operated daily by (QAN) and twice-weekly by (IMU). Service to Melbourne will be operated six-times-weekly by (IMU), increasing to daily July 1. Changes add 732 seats per week. Other services will remain as is.
2 A320-232's (2703, VH-VQJ; 2717, VH-VQI), deliveries.
April 2006: Jetstar (IMU) launched twice-weekly Adelaide - Sunshine Coast service and twice-weekly Adelaide - Hamilton Island service last week aboard A320s. (IMU) established a crew base at Adelaide in February and has based a second A320 there. Twice-weekly flights to Darwin will begin May 1. (IMU) said it also based an A320 at Avalon Airport outside Melbourne, allowing it to expand its Sydney service to five-times-daily. It will operate 130 weekly flights from Avalon, including daily Perth service launched March 28.
(IMU) said it streamlined its online booking process and noted that its website accounts for more than 80% of ticket purchases.
As expected, Australia's Qantas Group moved to rationalize its various airline brands, with leisure operator Australian Airlines (AUS) being absorbed into the mainline from July, and (IMU), the overseas arm of (QAN) domestic Low-Cost Carrier (LCC) (IMU), launching operations in November. CEO, Geoff Dixon told media that " (AUS) has done an outstanding job over the past few years, but we are determined to take full advantage of (IMU)'s success with its highly competitive cost structure and service standards." (AUS) was launched four years ago, but the twin Bali bombings and 2004 tsunami have taken a toll on passenger numbers. (AUS)'s cost base is -30% below that of (QAN), but (IMU)'s costs will be -45% lower yet, according to analysts.
About 40 (AUS) cabin crew positions will be lost through the transition to (IMU). However, (IMU)'s expansion into long-haul international service will result in +550 new jobs. (QAN) is determined to build on (IMU)'s domestic success, but is facing challenges from mainline pilots on its international plans.
(IMU) will start operations with four A330-200s transferred from (QAN), growing to a fleet of six by mid-2007. Initial destinations are Osaka from Sydney and Brisbane, Ho Chi Minh City and Phuket from Sydney, Bangkok from Melbourne, Bali from three Australian markets and Honolulu from Sydney and Melbourne. (AUS) services will cease between Cairns and Sydney, Hong Kong and Gold Coast, while Cairns - Singapore will be operated by (QAN) via Darwin.
Dixon said (IMU)'s network "will ultimately provide more services to Asia and the Pacific before expanding with second-stage flying to Europe and other destinations." It will transition to 311-seat 787-8s from August 2008, building to a fleet of 12, which will be used on routes to Europe and other long-haul destinations.
Unlike the budget version of (IMU) in Australia, Jetstar International (IMU) will interline with selected connecting carriers. Its mainline parent also will code share on its flights.
A320-232 (2642, VH-VQL), delivery.
June 2006: Competition regulators gave preliminary clearance to Qantas (QAN) to establish an interlinked low-cost carrier (LCC) network in Asia through its Jetstar (IMU)/JetStar Asia (JSA) brand, despite opposition from rival (LCC) Tiger Airways (TGR). The Australian Competition and Consumer Commission (ACCC) provided interim authorization for (QAN) and its wholly owned (JSA) subsidiary to cooperate with its 44.5% Singapore venture Orangestar Holdings - - the holding company for the combined (JSA) and Valuair (VLU) - - on fares, schedules and routings. This means the group can offer a consistent product and link up services operating into, out of and within Asia.
The (ACCC) said its initial determination was made on condition that the agreement between (QAN) and Orangestar does not extend to allocation of existing capacity, withdrawal of services on overlapping routes or entry onto routes to/from Australia. The authority has not made a final decision.
(QAN) proposes to bring together the operations of (JSA) and Orangestar in an attempt to reduce overheads further and enhance competitiveness. While (IMU) has proved a success story on domestic and trans-tasman routes, (JSA) has been struggling, with losses of -A$27.4 million in the December half-year.
The tie-up between the carriers will increase passenger feed and strengthen the position of the (IMU)/(JSA) brand in the Asian market as it begins flights between Australia and Thailand, Vietnam, Bali, Japan and Hawaii in November in the initial phase of its international expansion.
(IMU) will increase its Adelaide - Darwin service to five-times-weekly from twice-weekly on July 1. Six-times-weekly Melbourne - Darwin service will become daily the same day.
It also renewed its outsourcing agreement for Navitaire's reservations and revenue management systems. The deal includes new
code share booking and passenger processing capabilities.
A320-232 (2787, VH-VQG), delivery.
July 2006: JetStar International (IMU) is the low-cost subsidiary of Qantas Airways (QAN) operating scheduled domestic and international services.
(IATA) Code: JQ. (ICAO) Code: JST.
Parent organization/shareholders: Qantas Airways (QAN) (100%).
Alliances: Qantas Airways (QAN).
Main Base: Melbourne Tullamarine International airport (MEL).
Domestic, scheduled destinations: Adelaide; Ballina; Brisbane; Cairns; Coolangatta; Hamilton Island; Hervey Bay; Hobart; Launceston; Mackay; Melbourne; Newcastle; Proserpine; Rockhampton; Sunshine Coast; Sydney; & Townsville.
International scheduled destination: Christchurch.
(IMU), (QAN)'s new low-cost international arm, unveiled its product offering and fares in Sydney. Services will start November 23 to six destinations over nine routes with one-way fares from A$169/$127 to A$249. (IMU) will operate from Sydney, Melbourne and Brisbane to Bangkok, Phuket, Ho Chi Minh City, Osaka, Bali and Honolulu. The initial fleet will be 303-seat A330-200s with two classes of service including StarClass, a premium cabin. (IMU) will operate 787s from mid-2008, and will take the first 10 ordered by (QAN).
August 2006: Jetstar Airways (IMU) won approval from the USA Department of Transportation (DOT) to begin marketing proposed A330-200 flights from Sydney (thrice-weekly) and Melbourne (twice-weekly) to Honolulu scheduled to commence November 23. While final approval has not been granted, (IMU) CEO, Alan Joyce said (DOT) has "indicated to Qantas (QAN) that (IMU) is qualified to perform these international operations." (QAN) will continue to operate thrice-weekly Sydney - Honolulu service after (IMU) launches.
(IMU) said it initially will hire +200 flight attendants (CA).
Gate Gourmet (GG) signed a deal with (IMU) to supply catering services on its long-haul routes beginning in November. It already supplies (IMU)'s domestic routes.
September 2006: Jetstar International (IMU) will replace Qantas (QAN) on the Sydney - Townsville route from October 29 with five weekly flights aboard an A320.
(IMU) will inaugurate nonstop service from Sydney to Honolulu on December 27th subject to regulatory approval. (IMU) will operate 3 flights a week, on Tuesdays, Thursdays, & Saturdays, initially using an A330-200 to be replaced with a 787 from late 2008.
(IMU) will inaugurate nonstop service from Melbourne to Honolulu on December 29th subject to regulatory approval. (IMU) will operate 3 flights a week, on Mondays & Fridays, initially using an A330-200 to be replaced with a 787 from late 2008.
November 2006: Jetstar International (IMU) announced that it has received permission from the Civil Aviation Safety Authority to operate long-haul services from Australia. (IMU) said the addendum to its Air Operators Certificate (AOC) was the "final hurdle" it needed to negotiate before launching thrice-weekly (Mondays, Thursdays & Sundays) Melbourne - Bangkok service. (IMU) subsequently will start flights from Sydney to Phuket, (thrice-weekly on Mondays, Wenesdays & Fridays from November 24), Ho Chi Minh City (thrice-weekly on Tuesdays, Thursdays & Saturdays from November 30) and Bali (twice-weekly on Friday & Sundays from December 8). Twice-weekly on Tuesdays & Saturdays, Melbourne - Bali flights will start December 9. Next year, (IMU) will launch daily service to Osaka, from Brisbane and Sydney on March 25, six-times-weekly (except Wednesdays) Cairns - Nagoya flights (which will originate/end in Sydney twice-weekly) on August 2 and four-times-weekly on Mondays, Wednesday, Fridays & Saturdays, Cairns - Osaka service on September 8 and all flights will be aboard 303-seat A330-200s.
(IMU) starts international services on November 29th using an ex-(QAN) A330-201 (513, VH-EBD) - see photo. More A330s will join the fleet that will operate from Melbourne and Sydney to Bangkok, Denpasar, Honolulu, Vietnam and more destinations to be added as more airplanes join the fleet.
December 2006: Qantas Airways (QAN) is focusing its Japanese service on Tokyo Narita (NRT), following Jetstar International (IMU)'s approval to operate long-haul flights from Australia. "We intend to grow both (QAN) and (IMU) in international markets, but we must match the appropriate cost structure and style of service to individual markets," (QAN) CEO, Geoff Dixon said. "While (QAN) continues to be a major leisure travel provider, under its current costs, it requires a significant business base to sustain profitable operations on some key international routes." (IMU) will replace (QAN) on some Japanese routes, Dixon said, though the specific routes have not been determined yet. By summer 2007, (QAN) is scheduled to operate flights from (NRT) to Sydney (11-times-weekly aboard A330s), Melbourne (thrice-weekly aboard A330s), Perth (thrice-weekly aboard 767-300s), and Cairns (14-times-weekly). (QAN) began operating a seasonal Cairns - Sapporo service twice-weekly this month, and will continue flying the route through March.
Launches Sydney - Honolulu, 3/week; Melbourne - Honolulu, 2/week, both using A330-200s. Starting March 25, Sydney - Osaka, 1/day, using A330-200. Starting August 2, Cairns - Nagoya, 6/week; & starting September 8, Cairns - Osaka, 4/week; using A330-200s.
3rd A330-201 (VH-EBC), (QAN) wet-leased, delivery - see photo.
February 2007: Just one day after reporting a thumping profit, Qantas (QAN) was brought back to earth, when Singapore's Tiger Airways (TGR) unveiled plans to launch Australian domestic services by year end, with five new A320s.
During the announcement, (TGR) President & CEO, Tony Davis took a cheeky swipe at (QAN), saying his airline is ready to "deliver Australians genuine low fares, competing in a market which has returned to a cozy duopoly and seen fares increase."
Australians actually enjoy some of the world's cheapest airfares, with transcontinental fares from A$189/$147 on Jetstar International (IMU) or A$219 on (QAN) with full service. But there is a twist. While (QAN) and Virgin Blue (VOZ) serve all major trunk routes, (IMU) connects secondary airports with major cities. (TGR) intends to bring its fares, which are similar to or lower than (IMU)'s, to major trunk routes.
Davis claimed that "Unlike others in this market, we won't be a low-cost carrier (LCC) selling high fares. We'll be low cost and very low fare." (TGR) will launch Singapore - Perth service next month, and has been flying to Darwin for some time. Davis outlined (TGR)'s plans to federal ministers last week, started the process to obtain an Australian Air Operator's Certificate (AOC) and has filed with Australia's Foreign Investment Review Board. Contrary to most countries, Australia allows 100% foreign-owned airlines to operate domestically if it is in the national interest.
The move by (TGR) has been expected, as (QAN) is the largest shareholder in Singapore-based, Jetstar Asia Airways (JSA), (TGR)'s biggest rival. (TGR)'s major stakeholder is Singapore Airlines (SIA). Centre for Asia Pacific Aviation (CAPA), Executive Chairman, Peter Harbison said he "sees (TGR) more focused on a direct attack on the local market, rather than providing support to the Singapore flag carrier. But (SIA) would not weep over any adverse economic impact on one of its major rivals."
Davis is on the board of Perth-based, regional Skywest Airlines (SKD), but it is not clear what cooperation will evolve between the two airlines.
March 2007: Australian Transport Minister, Mark Vaile conceded that some Qantas (QAN) jobs may head offshore, if (QAN)'s sale to Airline Partners Australia (APA) goes through following the recent receipt of government approval. He also told viewers of the "National Nine" network that the government would not "micromanage" the new owners. Meanwhile, controversy over the government's refusal to extract job guarantees from (APA) continued. Pilot (FC) groups are concerned that while (QAN) may not be affected, low-cost offshoot Jetstar International (IMU) could be the vehicle to move work offshore. Australian & International Pilots Association (AIPA) General Manager, Peter Somerville told News Ltd that (IMU) offers (APA) "a way of dodging its undertakings to the government and to the public. The stripping of (QAN) into (IMU) and ultimate fire sale of the low-cost airline appears to be a key plank to the (APA) consortium's strategy." (AIPA) has launched legal action.
(QAN) will boost its domestic operation with nine new A320s to be delivered over a 15-month period from late 2007 and used by (IMU). The company is girding itself for the arrival of Tiger Airways (TGR) Australia, which aims to challenge (QAN) with a low-cost product. In addition, (QAN) said four 767-300s used in international operations and scheduled to be sold instead will be transferred to domestic routes in the middle of this year. "The additional capacity for both (IMU) and (QAN), along with previously announced plans for QantasLink (NJS), should enable the Qantas Group to maintain its 65% share of the Australian domestic market," CEO, Geoff Dixon said. (IMU) will use the new A320s on popular leisure routes and "to look at new destinations within Australia," he said.
April 2007: Qantas (QAN) announced an agreement with State Capital Investment Corp, the investment holding arm of the Vietnamese government, to purchase 30% of Pacific Airlines (PAH), the country's second-largest carrier. (QAN) CFO, Peter Gregg said the transaction should be completed within the next two months, "supporting Jetstar International (IMU)'s growth strategy and enabling us to extend our reach in Southeast Asia." (QAN) will help Pacific develop a new business plan and grow its small 737-400 fleet used on domestic routes and to Taiwan. "(PAH)'s strategy is to reposition itself as a low-cost carrier and expand within Vietnam and internationally," Gregg said, with (IMU) playing a major role. Insiders suggest that (PAH) will lease at least two 787s from (IMU) from 2009.
May 2007: Starting August 2nd, Cairns - Nagoya, using A330-200s. Starting September 8th, Cairns - Osala, using A330-200s.
New entrants in Australia and New Zealand, including Tiger Airways (TGR)'s foray into the market, are triggering a wave of deep discounting, according to the Sydney-based, Centre for Asia Pacific Aviation (CAPA). Qantas (QAN) subsidiary, Jetstar International (IMU), which celebrated its third anniversary, had 130,000 seats for sale, with companion fares as low as A$2.50/$2.06 on many domestic, transTasman and international routes. The sale was designed to head off (TGR)'s announcement of its choice of Melbourne Airport as its base. Virgin Blue (VOZ) retaliated with a -25% cut of its discount fares, while (QAN) also launched a five-day domestic sale. (CAPA) said the frenzy will cross the Tasman to New Zealand with confirmation that "Kiwijet," a new Low Cost Carrier (LCC) based on Southwest Airlines (SWA)'s business model, plans to take to the skies late this year.
June 2007: Tiger Airways (TGR)'s impending entry into the Australian market is altering the dynamics of the country's route structure. Recently, Qantas (QAN) low-cost subsidiary Jetstar Airways (IMU) announced plans to operate on the major Sydney - Brisbane route from December. The move represents a departure from the convention of not linking major capital city airports, a policy that protected (QAN) from direct competition. (TGR)'s entry later this year onto major routes, plus the mammoth expansion solidified with an order for 50 additional A320s announced at the Paris Air Show, has changed the playing field. While (IMU) flies midday, it now is likely that (QAN) will alter the schedule to fend off (TGR). (IMU) also is expected to begin serving Melbourne Tullamarine' it currently operates out of Avalon.
A330-202 (842, VH-EBE), delivery to (QAN) for (IMU) operations.
July 2007: The Australian domestic market is heading for intense price competition as Singapore-based Tiger Airways (TGR) announced more domestic routes and fares for its Australian launch in late November. (TGR)'s latest route announcement is Melbourne - Launceston with fares starting at A$39.99/$34.87. Its Australian operation will be based in Melbourne, and destinations include Perth, Mackay, Rockhampton, Alice Springs and Darwin. Qantas (QAN) low-cost subsidiary Jetstar Airways (IMU) bettered the Launceston fare with a A$29 offering. However, it has yet to match (TGR)'s Melbourne - Perth fare of A$59.95 recently announced. (IMU)'s best fare for that 4-hour transcontinental journey is A$99, inclusive of all charges and taxes. (TGR) plans to launch its Australian service on November 23, with all announced destinations in operation by December 1.
+20 orders 787s, making the carrier the 787's #1 customer with 65 orders. (QAN) said its order for 20 included the conversion of 20 purchase rights into options. It now has firm orders for 65 787s, 20 options and 30 purchase rights. CEO, Geoff Dixon said both the mainline (QAN) and (IMU) will use the airplanes on domestic and international routes. (QAN) will take delivery of its first 787-8 in July 2008, with the first 15 earmarked for (IMU)'s international operations. The first 787-9 will arrive in 2011. "In line with the company's two-brand philosophy, subsequent deliveries will be allocated between (QAN) and (IMU) on the basis of the best returns for the Group," Dixon said.
August 2007: A robust Australian economy fueled by resource demand from China helped propel the Qantas (QAN) Group to a record net profit of +A$719.4 million/+$595.4 million for the fiscal year ended June 30, despite a +19.1% increase in its fuel bill to A$3.3 billion. The profit was up +50% on the previous year's +A$479.5 million, and was boosted by revenue growth of +11% to $15.17 billion. Outgoing Chairman, Margaret Jackson said (QAN) generated a return above the cost of capital invested in all segments. The results include a A$47 million provision against liabilities, the company may incur in the USA for its alleged involvement in a freight cartel. Expenditure rose +8.5% to A$14.06 billion and operating profit soared +57.6% to +A$1.1 billion from +$698.6 million.
The Qantas Group carried 36.4 million passengers, up +7% on the previous year, as (RPK)s passenger traffic rose +7.4% to 97.62 billion, and capacity grew +3.4% to 122.12 billion (ASK)s, lifting load factor +2.9 points to 79.9% LF. Passenger yield increased +6.9% to 11.69 cents. Star performer in the group was Jetstar Airways (IMU), where passengers jumped +31.8% to 7.6 million and load factor climbed +1.2 points to 75.25 LF.
CEO, Geoff Dixon, said the result and (QAN)'s strong operating position were underpinned by the two-brand strategy. "We believe the transfer of 15% of marginal domestic and transtasman flying from (QAN) to (IMU), the transfer of (QAN) capacity to better performing domestic routes, and increased investment in the (QAN) product have improved the Group's [pre-tax] bottom line over the past three years by A$250 million," he said.
The company also announced a A$1 billion, or 10%, share buyback. Going forward, Dixon warned of "increasing levels of competition, with state-owned Middle East hub carriers poised to increase significantly their Australian capacity, new low-cost labor entrants Tiger Airways (TGR) and AirAsia X (ASW), and Virgin Blue (VOZ) commencing transpacific services in 2008."
He added that extension of (QAN)'s successful segmentation program, a process that was accelerated following the unsuccessful Airline Partners Australia bid, will be a major focus. "We believe we can unlock further value from our individual businesses and work is underway across the company, most notably in our Frequent Flyer, Freight, Fleet and Holiday divisions. We are looking at potential new ownership structures and strategic acquisitions and we expect to make announcements during the current financial year."
For the 2007 - 2008 year, Dixon forecast a +30% lift in operating profit given "no major deterioration in market conditions."
(QAN) finalized the first of three investment installments in Vietnam's Pacific Airlines (PAH), taking an 18% stake. The entire investment for 30% will be concluded over the next two years. (IMU) CEO, Alan Joyce, and CFO, David Hall will represent the Qantas Group on (PAH)'s six-member board, while (QAN) and (IMU) executives will fill a number of key anagement roles to support the investment. (PAH) eventually plans to fly internationally.
A330-202 (853, VH-EBF), delivery to (QAS) for (IMU) operations.
October 2007: Qantas (QAN), the largest customer for the 787, was among several carriers that offered generally muted responses to Boeing (TBC)'s announcement that it will delay first flight and first delivery by at least six months. (QAN) said the delivery delay will not "materially impact the operations of the Qantas Group of airlines." CEO, Geoff Dixon said Boeing (TBC) had assured the carrier that the 15 787 Dreamliners scheduled for delivery between August 2008 and December 2009 all would arrive by the 2009 date. " (TBC) said the August 2008 airplanes would slip, but not by six months. Once that airplane arrives, the remaining 14 airplane deliveries will be staggered until December 2009," he said. The group has 65 firm orders for the 787, 20 options and 30 purchase rights, with the first 15 scheduled for Jetstar Airways (IMU)'s long-haul operation. Dixon said (QAN) had contingency plans for any short-term capacity shortages.
November 2007: Parent, (QAN) said it will buy 188 narrow-body airplanes to expand its shorthaul fleet for domestic routes and flights in Asia. (QAN) will buy 31 737-800s with options for 49 more airplanes. It will also buy 68 A320 and A321 (213Y passengers) airplanes with options for 40 more. (QAN) expects to acquire up to 17 A321s and will become the first to operate the variant in Australia. Geoff Dixon, CEO wants the expanded fleet to help defend the 65% of the Australian domestic market, controlled by his brands (QAN), and Jetstar International (IMU). The first A321s will be delivered in February, while the 737-800s will arrive during a six-year period starting in early 2009. The 737-800s will be delivered with state-of-the-art, In-Flight Entertainment (IFE). Dixon noted that the 737-800s, which will replace the last of its 737-400s, will have a -25% lower fuel burn per seat and -30% lower maintenance cost. Some of the A320s are earmarked for Pacific Airlines (PAH) in Vietnam, in which (QAN) is acquiring a 30% stake.
(IMU), which is based in Melbourne, Victoria, Australia, soon will open bases in Perth and Darwin to launch new services into Asia.
December 2007: Tiger Airways (TGR) took to Australian skies on schedule with its first flights from Melbourne to Gold Coast, Rockhampton and MacKay in Queensland after being awarded its Air Operator's Certificate (AOC) two days earlier. Plans to operate to Alice Springs from December 1 have been grounded after a breakdown in ground handling arrangements with Qantas (QAN). The service now will start on March 1.
(TGR) CEO, Tony Davis, issued a warning to Australia's Jetstar Airways (IMU): "We are reducing our costs all the time."
While Davis declined to provide a figure, (IMU)'s unit cost, excluding fuel, fell -7.4% last fiscal year, to 5.49 Australian cents/4.8 US cents. AirAsia (ASW) boasts (CASK), excluding fuel, of 1.56 USA cents.
Regarding (TGR)'s recently launched Australian domestic operation, Davis said that "forward sales are significantly ahead of budget, and we are pleasantly surprised by the level of demand."
January 2008: Jetstar Airways (IMU) will base an additional A320 at Cairns and launch twice-daily, Sydney - Cairns service aboard an A320 and 11-times-weekly, Melbourne - Cairns flights, aboard an A321 on March 18. Thrice-weekly, Brisbane - Cairns will become four-times-weekly, on June 1. It will take over daily, Cairns - Darwin - Singapore service, currently operated by Jetstar Asia (JSA) and launch a Cairns - Darwin daily, on February 1.
February 2008: The impact of a softening global economy and high fuel prices apparently has yet to reach Australia, where Qantas (QAN) reported a profit of +A$618.1 million/+$566.4 million in the fiscal semester ended December 31, more than double the +A$307.3 million earned in the year-ago period. (QAN) is targeting a +40% year-over-year increase in full-year pre-tax earnings. "While we have benefited from a strong revenue environment, our focus has also remained on costs, efficiencies, customer service and product improvement. Our results reflect these efforts," Chairman, Leigh Clifford said. The carrier added that it sees "no significant dampening in demand in most markets" going forward, save "some softening" in the UK, and "continued weakness" in Japan. "The Group's ongoing business transformation initiatives have ensured that (QAN) is well positioned to meet ongoing challenges, including fuel prices and competitor capacity growth," it said.
Half-year revenue climbed +6.4% year-over-year to A$8.13 billion against a +3% rise in costs to A$7.28 billion. Operating profit jumped +48.6% to +A$849.6 million from +A$571.6 million earned in the six months ended December 31, 2006. CEO, Geoff Dixon said keys to the result were a +2.2% increase in yield to A11.85 cents and a +1.8-point rise in load factor to 82.1% LF, the strengthening and further segmentation of the group's various brands, a +A$113 million profit at Jetstar Airways (IMU) that represented a fourfold year-over-year improvement, and a -3.3% reduction in unit costs. In addition, (QAN) realized A$311 million through its Sustainable Future Program. The company reported segment results for the first time. In addition to the mainline (QAN) and (IMU), the Loyalty Segment posted a pre-tax profit of +A$62 million, while (QAN) Freight Enterprises suffered a -5.4% fall in pre-tax earnings to +A$53 million. Half-year traffic for the group grew +6.3% to 52.26 billion (RPK)s, against a +3.9% rise in (ASK)s to 63.63 billion. It operated 216 airplanes at semester's end compared to 214 the prior year.
(IMU) CEO, Alan Joyce claimed that Australia has evolved into "the most competitive market of any aviation market anywhere in the world." Speaking at a breakfast in Melbourne, Joyce said that despite competition from Virgin Blue (VOZ) and now Tiger Airways (TGR)/(TGA), (IMU) will generate pre-tax earnings of A$1.6 billion/$1.44 billion in the 2007 to 2008 financial year. In the prior fiscal year, it contributed A$115 million to (QAN)'s profit.
He also used the occasion to unveil Jetstar Lite, where passengers will be given a A$10 incentive to limit baggage to carry-on on domestic flights and A$20 if they do not check luggage on international flights.
Joyce said (IMU) will grow by +40% this year, and is about to take delivery of the first of 17 213-seat, A321s to complement its fleet of A320s. The A321s will give it a -6% reduction in fuel burn per passenger, he said. They are part of a 68-airplane order placed last year. SEE ATTACHMENT - "(IMU) PLANS MAR08."
2 A321-231s (1195, VH-VWZ; 1438, VH-VWX), ex-Spirit Airlines (SPR), Pembroke Capital (PEB) leased.
April 2008: Regarding the "Open Skies" bilateral agreement between Australia and the USA, please read the attached - "IMU-AUS-USA-APR08."
JetStar (IMU)'s domestic network includes: Adelaide; Ballina/Byron Bay; Brisbane; Cairns; Darwin; Fraser Coast; Gold Coast - Coolangatta; Hamilton Island; Hayman Island; Hobart; Launceston; Mackay; Melbourne/Avalon; Melbourne/Tullamarine; Newcastle; Perth; Rockhampton; Sunshine Coast; Sydney; Townsville; & Whitsunday Coast.
Vietnam's "Pacific Airlines (PAH)," in which the Qantas Group purchased an 18% stake with an agreement to raise that holding to 30% in 2010, will change its name to "Jetstar Pacific (PAH)" as part of a partnership with (QAN), that will see it become "Vietnam's first low-cost, value-based airline." The name change will take effect May 23 and is part of a new business service agreement under which (PAH) will operate domestic and international flights under the Jetstar Pacific (PAH) brand, while "providing everyday low fares and a standardized customer experience." It will take delivery of up to 30 A320s by 2014, with the first "proposed" to enter service this August. The Qantas Group placed a large Airbus (EDS) order last fall. The deal also includes development of a Vietnamese website and "new commercial and distribution agreements," (IMU) said. "(PAH) will be able to access and leverage the significant expertise and resources within the Qantas Group, that will help enable its planned future growth," (QAN) CEO, Geoff Dixon said. "This includes the placement of (QAN) and (IMU) executives in key management roles within (PAH) and the supply of a range of aviation services."
(QAN) initially invested in (PAH) one year ago. (PAH) currently serves seven domestic destinations with four 737-400s, but plans eventually to increase its 130 weekly flights eightfold. (PAH) will start by adding service from Ho Chi Minh City to Da Lat and Buon Me Thout, and from Hanoi to Da Nang, Hue, and Cam Rahn. (PAH) also will expand its Ho Chi Minh - Hanoi service. (IMU) currently offers flights to Ho Chi Minh from Sydney and Singapore.
A320-232 (3474, VH-VQF), delivery.
May 2008: Qantas (QAN) will slash capacity by -5%, due to rising fuel prices and warned the Australian Stock Exchange that it plans to cut its fleet, network and workforce, as it expects its fuel bill to increase by more than >A$2 billion/$1.92 billion in the 2008 to 2009 fiscal year. CEO, Geoff Dixon said in a statement to the exchange: "The fact is that fuel prices are something we have no control over, so we have to look harder at areas where we do have control. Despite our fuel hedging strategy, fuel surcharges, two separate across-the-board fare increases and a recruitment freeze, we are not bridging the widening gap between the actual increase in the cost of fuel and the amount we offset.''
(QAN) will retire one 737-400, ground two 767-300ERs, and one Jetstar Airways (IMU) A320, and cancel delivery of one (IMU) A321. Also on the hit list are four 747-300s (QAN) uses on flights between Sydney/Melbourne and Perth, that will be phased out by December. They will be replaced by A330s released from international duty with the arrival of the airline's first A380s. (QAN) also plans to reduce the flying time of its 747-400 fleet.
(QAN) and (IMU) will quit five domestic routes altogether and reduce frequency on four others, and the company is restructuring its international network, where the cuts are expected to be deeper. Dixon also warned of staff cuts as well as an accelerated leave program to mitigate the requirement for redundancies.
Jetstar Pacific (PAH), Vietnam's first low-cost carrier (LCC), launched commercial operations as part of the Qantas Group. It has become the first Vietnamese carrier to offer online booking to domestic customers. (QAN) holds 18% of the (PAH) and will increase its investment to 30% in 2010. (PAH) has four 737s and will add a fifth next month, but it eventually will fly up to 30 A320s.
A320-232 (3495, VH-VQE), (ILF) leased.
June 2008: The Qantas Group announced a series of changes to its international network, owing to fuel expense. CEO, Geoff Dixon said Japan and Southeast Asia will be most affected. "The Japan - Far North Queensland market has also been particularly difficult for Qantas (QAN) for a number of years," he noted. "At current fuel prices, the Group would lose more than >-A$100 million/-$95.7 million operating to Japan under our existing schedule." The restructuring, which follows a similar exercise on (QAN)'s domestic operations, involves quitting routes, reducing services, airplane substitution, and product delivery changes.
(QAN) will end thrice-weekly, Melbourne - Tokyo Narita (NRT) A330 service and reduce Sydney (SYD) - (NRT) A330 flights from nine-times-weekly to seven in September. Low-cost subsidiary, Jetstar Airways (IMU) will drop Cairns - Osaka - Nagoya service in December, and operate a daily A330 service between Cairns and (NRT), replacing (QAN)'s 14 weekly 767 flights. (IMU) also will drop its (SYD) - Kuala Lumpur operation, and replace its existing thrice-weekly, A330 service between (SYD) and Ho Chi Minh City (SGN), with five A320 flights on a (SYD) - Darwin - (SGN) routing in September. It will take over (QAN)'s flights from Perth to Denpasar and Jakarta in December.
Asia/Pacific airlines are responding rapidly and emphatically to the soaring cost of fuel and slowing global economy. Thai Airways (TII) announced that it will quit its nonstop services from Bangkok to New York (JFK) and Los Angeles, and sell off its four A340-500s to help stem losses due to surging oil prices. It estimates that losses on the two routes at current fuel prices would top $120 million. China Airlines (CHI) told "Bloomberg News" that it will ax 100 flights per month - - 10% of its capacity - - mainly to the USA, while (EVA) Air told the same news agency that it will cut services by -5%. (CHI) also will eliminate -50 all-cargo flights per month. However, on the upside is the likelihood of launch of weekend direct charter flights between Taiwan and mainland China, which will serve as a prelude to full scheduled services. Meanwhile, Air New Zealand (ANZ) announced it will raise fares for the second time in three weeks and cut services. Domestic and some international airfares will increase +4%, with flights to Australia, Japan and Hong Kong scaled back. These changes follow last month's fare hikes of an average +3% and a lowering of its profit forecast. Recently, (QAN) and (IMU) also have announced schedule reductions.
A330-201 (940, VH-EBJ), delivery.
July 2008: Jetstar Airways (IMU) will launch daily, Perth - Singapore on December 2 aboard an A320.
The Qantas Group unveiled an overhauled Qantas (QAN) Frequent Flyer program, offering its more than >5 million members the option of using points to book any seat on any (QAN) or (IMU) flight. (QAN) Frequent Flyer CEO, Simon Hickey said the enhanced program combines a range of new and expanded benefits with the more traditional fixed points redemption option that has been available for many years. The change follows the lead taken by the Virgin Group and Air New Zealand (ANZ) more than three years ago, a fact conceded by Hickey, who said (QAN) analyzed feedback from program members in Australia and New Zealand, as well as the most popular aspects of other loyalty programs around the world when designing the upgrades. (QAN) Frequent Flyer is the largest program in the Oceania region and a strong business in its own right, with more than >5,000 new members joining weekly. Hickey told media that "last year (QAN) Frequent Flyer members redeemed points for more than >9 million seats."
Under the new "Any Seat Award" option, members with sufficient points can access more than >3 million seats each month in all classes covering more than >140 destinations in 38 countries. Members also can take advantage of the "Points Plus Pay" option, which allows them to use a combination of points and credit card payments, or the traditional (QAN) and Partner Classic Awards option. However, as expected, "Any Seat Awards" will cost more, because they reflect the commercial fares available and include all taxes and charges.
Meanwhile, analysts continue to suggest that (QAN) will float the Frequent Flyer program. The airline will announce its intentions next month.
August 2008: A change in leadership in senior management has occurred at Qantas (QAN), following the appointment of Jetstar Airways (IMU) CEO, Alan Joyce to succeed Geoff Dixon, CEO. Australian media have been reporting that (QAN)'s senior management was stunned by Joyce's appointment and that Peter Gregg, CFO, and Executive General Manager Airlines, John Borghetti, who were considered by some as frontrunners for the CEO position, were not given an opportunity to make a presentation to the board and were unhappy with the selection of Joyce.
September 2008: The Qantas Group named Jetstar Airways (IMU) General Manager, Bruce Buchanan to take over the (IMU) CEO role on October 1, replacing Alan Joyce, who will take over the reins at Qantas Group in November. Buchanan participated in (IMU)'s establishment in 2003, and has been a critical driver of the expansion of the (IMU) brand and operations both domestically and internationally. Meanwhile, Joyce already is putting his stamp on (QAN) management, according to Australia's "ABC," by poaching a senior Virgin Atlantic Airways (VAA) executive, Lyell Strambi, who will take up a newly created General Manager position at (QAN). Strambi and Joyce both worked at Ansett Australia (ANS) in the late 1990s.
(IMU) announced an expanded flight schedule from October 28, increasing Sydney - Hobart service from 11 to 14 weekly flights, Sydney - Gold Coast from eight to 10 flights daily, Perth to Melbourne from once to twice-daily, Sydney - Melbourne Avalon from six- to seven-times-daily, and Melbourne - Byron Bay from thrice-weekly to daily. (IMU) also is replacing A320s with A321s on its six-times-daily, Melbourne - Gold Coast route and the thrice-weekly, Melbourne - Townsville route. The Gold Coast is (IMU)'s largest leisure market.
Japan Airlines (JAL) will place its code on (IMU)'s five-times-weekly, Osaka Kansai - Gold Coast - Sydney from October 1, replacing the routing via Brisbane, and daily Tokyo Narita - Cairns from December 18.
October 2008: Jetstar Airways (IMU)'s new CEO, Bruce Buchanan, downplayed the impact of Tiger Airways (TGR) in the Australasian market (as Tiger Australia (TAU)), saying that his focus is on "bigger [low-cost] competitors with large fleets, that have a significant impact on the market. There is only one or two in the Asian region and I don't put (TGR)/(TAU) in that category."
Virgin Blue (VOZ) operates more than >50 airplanes and has local market presence, while Kuala Lumpur-based AirAsia (ASW) has 70 airplanes and has been frank about its ambitions.
(TAU) currently operates just five airplanes in Australia, but last year, (TGR) ordered 50 A320s for Asian operations. It has been coy on where they will be deployed, but short-term Australian plans indicate a fleet of eight airplanes. "We do take them seriously and we welcome competition. It's good for the economy and it's healthy for us - - keeps us nimble," Buchanan said.
(IMU)'s fleet comprises 31 A320 family airplanes with 68 more deliveries planned through 2013. (IMU) now serves 20 Australian destinations and 29 internationally from Australia, and hubs in Singapore and Hanoi. Buchanan said it is "well placed to sustainably put more low fares into the marketplace." Passenger numbers in the year ended June 30 rose +32.3% year-over-year to 5.8 million, while (RPK)s traffic soared +47.5% to 6.41 billion, with load factor at 71% LF.
As the strike by the International Association of Machinists (IAM) and Aerospace Workers appeared to be concluding, Boeing (TBC)'s largest airline customer for the 787, the Qantas Group confirmed that its first 787 Dreamliner could be up to an additional six months late.
(IMU) executives said that (IMU)'s first 787 is not expected until May 2010, 21 months later than the original schedule. A spokesperson added, "Based on what we have been told, we are working on contingencies and planning for a further three-to-six-month delay in our delivery, although (TBC) is yet to formally confirm that." The lag is far longer than the 54-day (IAM) strike and confirms a report last month that there has been further slippage in the program, possibly due to brake control issues.
(IMU) and (QAN) have ordered 65 787s, with the original schedule calling for the first 15 to arrive one per month at (IMU) from August 2008. When (TBC) announced its third program delay last April, (IMU)'s first delivery, ship 21, had slipped 15 months to November 2009.
(TBC) encountered power supply and brake software problems early this year, and while the power issues were resolved in time for the June power-on goal, the software problems lingered until last month. The brake control monitoring system is supplied by Crane Aerospace to GE Aviation Systems (GEC). (GEC) said that "there are [now] no outstanding issues," and added last week that the software is "running well. The brake control monitoring system hardware for the test airplane has been completed as well."
First flight, and thus first delivery, have been complicated and delayed further by the machinist strike.
(TBC) Chairman, President & CEO, Jim McNerney said last week in a teleconference that the 787 was "on schedule" for a fourth-quarter test flight "pre-strike." He said the supply chain "largely healed up" and had caught up before the (IAM) walked out on September 6. But ongoing production problems have delayed the planned ramp-up as well as first flight and delivery, with some delivery delays stretching to two years. Launch customer (ANA) confirmed that the ambitious production ramp-up schedule will not be achieved. It suggested that its first airplane arrive next August, but that now appears to have slipped to early 2010. - SEE ATTACHED ARTICLE - - "IMU-787-NEWS-NOV08."
January 2009: Domestic airfares in Australia have plummeted -30% in a year to the lowest point in 17 years, according to data released by the government's Bureau of Infrastructure, Transport and Regional Economics (BITRE). While the lowest fares fell dramatically, domestic business class (C) fares eased just -1% but are expected to decline more significantly in the coming months as the economy continues to slow and business confidence sinks to its lowest level since surveys were launched in 1998. An Australian Chamber of Commerce and Industry (ACCI) investor confidence survey found that expectations for early 2009 were even worse than 2008. (ACCI) said business conditions and sales were at their lowest levels since 1998 when the survey began and profitability was at its lowest level in seven years. The (BITRE) Domestic Air Fare Index is not expressed in actual fares but as an index. The January 2008 index of 56.1 is almost half that of January 1993.
Fares also are expected to nosedive on international routes from February, with some Australia-based airline executives describing forward bookings as "extremely weak." On the Pacific, V Australia (VAZ) is due to launch 777-300ER service on February 27 with fares starting at A$1,199/$827.65 return. Delta Air Lines (DAL) will launch Atlanta - Los Angeles - Sydney flights on July 1. On shorter-range routes, both Tiger Airways (TGR)/Tiger Australia (TAU) and AirAsia X (ASX) are offering significant discounts, with a A$206 one-way Melbourne - Singapore fare and a A$199 one-way ticket to Kuala Lumpur from Melbourne and Perth.
Jetstar Airways (IMU) revealed that its first 787-8 will not be delivered until the latter half of 2010. The Qantas Group subsidiary was expecting the first airplane in the second quarter of 2010 after the most recent delay in the 787 schedule was announced last month. An (IMU) spokesperson told "The Australian" that "it's obviously all predicated around the timing of first flight and how the program rolls from there. But based on what they've outlined and when they project the first flight will be, it will be the latter half of 2010 at this point in time." The spokesperson added, "We're not going to put a month on it but obviously our planning is now around the latter half of 2010." (IMU) and (QAN) have ordered 65 787s.
A320-232 (3743, VH-VQB), (ILF) leased.
February 2009: Jetstar Airways (IMU) launched flights from Perth to Adelaide (daily) and Cairns (thrice-weekly), and thrice-weekly, Gold Coast - Cairns service aboard A320s.
The Qantas Group will restructure its New Zealand and China networks as it strives to remain profitable, and CEO, Alan Joyce denied speculation that the moves are a portent of things to come on its Australian operations. From June 10, Qantas (QAN) flights on New Zealand domestic routes will be taken over by (IMU). In addition, (QAN) will quit its Sydney - Beijing (on April 17) and Melbourne - Shanghai (March 31) flights, flagging the weakness in China's economy. The restructure comes two weeks after the Qantas Group reported a -65% plunge in its half-year profit to +A$216 million/+$140.5 million.
The New Zealand changes are seen by some as the start of a trend that will see (IMU) replace the mainline on an increasing number of routes. Centre for Asia Pacific Aviation (CAPA) CEO, Derek Sadubin said that, "Without a doubt, (IMU) will take over more (QAN) routes. We have already seen evidence of this recently with the Adelaide to Cairns route and you will also see (IMU) operating more regional short-haul international routes."
Joyce said that (IMU) will "grow aggressively but in harmony" with (QAN). He said the Australian and New Zealand operations are not comparable and denied any wholesale takeover of (QAN) Australian domestic trunk routes by (IMU). "Australia is very different and we are making money [on (QAN) routes] even in current times. Certainly there will be some more tweaks," he said.
The restructuring also includes the retirement of (QAN)'s eight 130-seat 737-300s/-400s, which will reduce capacity by an additional -1%, according to Joyce. (QAN) still will operate flights between Australia and New Zealand, occasionally in competition with (IMU), and will upgrade to new 737-800s with seat-back In-Flight Entertainment (IFE) throughout. (IMU)'s New Zealand network will comprise Auckland, Christchurch, Wellington, and Queenstown. Rotorua no longer will be served.
Late last year, (QAN) announced a series of cuts that effectively grounded 10 airplanes. "Instead of growing international routes by +5% we are contracting by -8%," Joyce said.
An (IMU) spokesperson said that with costs -40% below (QAN)'s, the subsidiary is in better shape to respond to market demands for lower fares in difficult economic times.
Australia and New Zealand authorities are moving toward scrapping customs checks for trans-Tasman flights, which could reduce return fares by approximately -A$100/-$64.44 and provide a travel stimulus, airline executives said. Flights between the countries would be reclassified as domestic. Passengers would either partially clear customs before boarding via automated border processing gates or customs checks would be eliminated entirely. Officials have been in discussions for more than >18 months, but the sticking point has been Australian Customs Service concerns that New Zealand's screening was not as robust. The issues have been addressed and working groups are closing on the fine detail of the scheme.
Virgin Blue (VOZ) CEO, Brett Godfrey said that removal of the Australia Passenger Service Charge of A$48.42 on one-way fares would be "a great boost to travel" across the Tasman Sea. A Jetstar Airways (IMU) spokesperson said that the Qantas Group airline supports the concept and highlighted that even a 1% change in fares resulted in a 2% change in behavior in passenger movement. "Without doubt this would be a great stimulus to travel between Australia and New Zealand," the spokesperson said, adding, "We are now working with the various parties to refine a secure and seamless system."
(IMU) launched Navitaire's New Skies reservation system following a successful migration from "Open Skies."
A320-232 (3783, VH-VQA), (ILF) leased.
March 2009: (QAN) domestic flights were halted for 4 hours during a wildcat strike by the airline's baggage handlers. The action affected some 400 flights and about 50,000 travelers. The Transport Workers Union (TWU) was protesting Jetstar Airways (IMU)'s decision to take its ground handling contract away from Qantas Airport Services and award it to independent, and cheaper, Aero-care. (TWU) officials initially claimed Aero-care's workers lacked security clearance but later changed the focus of the dispute to job security. It released a statement calling for (QAN) to stop outsourcing work and said it "did not take the decision to stop work this morning lightly and will remain vigilant in ensuring all travelers, as well as the general public, can fly as safely as possible." All Australian airport workers require an Airport Security Identity Card regardless of company.
The Australian government will conduct an inquiry into security at the nation's airports amid allegations that it is well below recommended standards. Federal Home Affairs Minister, Bob Debus said the inquiry will be independent of the Australian Federal Police, who are responsible for airport security, and initially will focus on the events surrounding the brutal killing of a man at Sydney Airport on March 22 in what appears to have been part of a feud between two biker gangs. The Police Federation of Australia union said that according to the Australian Federal Police annual report, staffing numbers at airports are up to -35% fewer than recommended.
A321-231 (3899, D-AVZW), CIT Group (TCI) leased.
April 2009: Qantas (QAN)'s international operation suffered its worst-ever traffic decline in February, with passenger numbers plummeting -16.8% year-over-year to 554,000. Domestic passengers slumped -10.1% to 1.2 million, while low-cost subsidiary Jetstar Airways (IMU)'s domestic passenger count was off -3.3% to 556,000. The only bright spot was Jetstar International (IMU), where passengers jumped +25% to 162,000. Overall, the airline group reported a -8.4% decline to 2.7 million passengers, with (RPK)s traffic dropping -10.1% to 7.31 billion and capacity (ASK)s falling 7.6% to 9.32 billion. Load factor sank -2.2 points to 78.4% LF. On a fiscal year-to-date basis for the eight months ended February 28, the group suffered a -1.6% slide in passengers to 25.6 million, with (RPK)s falling -3.7% to 66.9 billion and (ASK)s easing -0.8% to 83.8 billion. Load factor was down -2.4 points to 79.8% LF.
(QAN) unveiled a streamlined ownership structure for Singapore-based Jetstar Asia (JSA) and Valuair (VLU) designed to provide a growth platform in line with its pan-Asian strategy. Under the structure, Qantas Group and Singapore-based Westbrook Investments acquired all shares in Orangestar Investment Holdings, the previous ownership holding structure, via a new holding company, Newstar Investment Holdings. Financial terms were not disclosed. Westbrook, wholly owned by Choo Teck Wong, will hold 51% of Newstar. Choo is a longtime partner of (QAN) and will be Newstar's Chairman. (JSA) CEO, Bruce Buchanan and Orangestar Director, Paul Edwards also will serve on the new board. Chong Phit Lian will remain CEO of both (JSA) and Valuair (VLU).
Buchanan said that "coordination of (JSA), (VLU) and Jetstar (IMU) operations will provide better opportunities for customers by aligning their product offerings, while ensuring the (IMU) business model is applied across each business." He cited the ability to offer cheaper (IMU) "Lite" fares on (JSA) as an example. (Qan) previously had held 45% of Orangestar, with Temasek, the Singapore government's investment vehicle, owning 19%. Local businessmen held the balance.
Following its announcement that it plans to sell 10 airplanes and defer delivery of at least 16 more (including four A380s), (QAN) would not be drawn into commenting on the fate of its first 15 787s as speculation mounted that they also may be deferred. The first 15 are the shorter range 787-8 model while the balance of the group's order for 65 787s are 787-9s. CEO, Alan Joyce said (QAN) is in negotiations with Boeing (TBC) so he could not comment, a sentiment that was echoed by (TBC). However, sources at (QAN) said that "the ball is very much in (TBC)'s court," although "(QAN) really wants those airplanes." The 787-8s are earmarked for low-cost subsidiary Jetstar Airways (IMU) and are to be used on routes to Japan and to launch new services to Europe.
(TBC) has been working hard to secure earlier deliveries to make up for both the delay in the 787 program and the stretch-out in the delivery schedule. It is understood that (IMU) has been offered some extra airplanes from positions belonging to Northwest Airlines (NWA) and Chinese carriers.
Originally, the Qantas Group was to receive one 787 per month for 65 months beginning last August. (IMU)'s first 787 now is due to be delivered in May 2010 and the rate of delivery has slipped to one every 6 to 8 weeks. However, because the Qantas Group is under financial strain and the initial 787s are overweight, pressure is being applied to (TBC) to sweeten the deal.
Joyce said that he expects a resolution within a few weeks. If a deal cannot be struck, it is expected that more mainline A330s will be transferred to (IMU).
(TBC) started the (Trent 1000) engines on its first 787 test airplane and is finalizing a deal with Qantas (QAN) to avoid 787 Dreamliner deferrals. (ZA001), which spent last week completing its fuel tests along with an (APU) start, was due to leave the fuel dock to be moved to the flight line. (ZA002), the second flight test airplane, was rolled out of the paint hangar in (ANA) colors, although (ANA)'s first 787 is slated to be (ZA007).
Even as it prepares for first flight, (TBC) has done some 11th hour juggling of its 787 production positions to satisfy a (QAN) demand for better delivery of its order for 65. The deal will ensure that (QAN) low-cost subsidiary Jetstar (IMU) will get 15 787-8s over 18 months from May next year to spearhead a major expansion program to Europe. (QAN) had threatened to defer some early 787s, but (IMU) now will get airplanes originally destined for some Chinese carriers and Northwest Airlines (NWA). (QAN) originally contracted to get one a month for 65 months from August 2008 but Boeing (TBC)'s production problems have thrown that program into disarray.
An (IMU) spokesperson could not confirm a final agreement on the rearranged delivery schedule but he said (IMU) is planning for its first delivery next May. (QAN) plans to use 15 787-8s for (IMU)'s expansion and 50 787-9s to replace its own 767 and A330 fleets.
2 A321-231s (3899, VH-VWX; 3916, VH-VWW), CIT Group (TCI) leased.
June 2009: Jetstar Airways (IMU) launched services in New Zealand, taking over parent Qantas (QAN)'s flights between Auckland, Christchurch, Wellington, and Queenstown. The (QAN) mainline under JetConnect (QNZ), which operated a small fleet of 737-400s in New Zealand, will withdraw from domestic service there.
INCDT: (IMU) A330-200 en route from Osaka Kansai to the Gold Coast was forced to divert to Guam after smoke was detected, followed by flames flaring from the rearmost cockpit window on the airplane's right side in the area where the window heater is located. The Australian Transport Safety Bureau launched an investigation. The A330, carrying 203 passengers and crew, left Osaka just before 11 pm local time Wednesday, June 10. The fire occurred about 3 hour 50 minutes into the flight. An (IMU) spokesperson said that "the pilots (FC) quickly extinguished the fire, which didn't extend to any part of the cabin area . . . The airplane is only two years old and will be held in Guam until the cause of the fire is established."
(QAN) became the latest customer to cancel and/or postpone orders for the 787 Dreamliner, reaching an agreement with Boeing (TBC) to drop orders for 15 787-9s scheduled for delivery in 2014 through 2015, reducing its order book for the airplane to 50, and also deferring 15 787-8s by four years. (QAN) will not get its first 787 until 2013. Originally it was due to receive one per month for 65 months beginning in August 2008. (TBC)'s continuing troubles on the 787 program mean that all customers will receive the airplane between two and four years late.
The largest airline customer for the 787, (QAN) said the cancellation is in response to the steep downturn in airline traffic, with CEO Alan Joyce emphasizing that the decision was not linked to ongoing problems with the 787 Dreamliner, including a sixth delay in the airplane's first flight announced by (TBC). "(QAN) announced its original 787 order in December 2005 and the operating environment for the world's airlines has clearly changed dramatically since then," Joyce said. Based on list prices, the cancellation will relieve (QAN) of $3 billion in capital requirements. The effect will be far-reaching, putting on hold low-cost subsidiary Jetstar (IMU)'s European expansion plans and delaying (QAN)'s replacement of its aging 767 fleet. (IMU) now will get the larger, longer-range 787-9 instead of the 787-8, with the latter model replacing 767s in mainline domestic operations.
(TBC) now has suffered 72 787 cancellations this year. This is also (QAN)'s second airplane deferral. In April, it announced it had postponed deliveries of four A380s and 12 737-800s. (QAN) It also said it would park 10 airplanes.
The downturn has led (QAN) to forecast a full-year pre-tax profit for its fiscal year ending June 30 of between A$100 million/$80 million and A$200 million, well below last year's A$1.4 billion pre-tax profit.
Joyce said that while the latest 787 delay is disappointing, (QAN) remains "committed to the airplane as the right choice for (IMU)'s future international expansion, (QAN)'s growth and as a replacement for (QAN)'s 767 fleet." (QAN) holds options for 50 additional 787s.
A320-232 (3917, VH-VGZ) and A321-231 (3948, VH-VWU), deliveries.
August 2009: Australia and New Zealand are expected to move toward common air travel borders this month, cutting red tape and airfares.
New Zealand Prime Minister, John Keys and Australian Prime Minister, Kevin Rudd are expected to announce the streamlining of arrivals and departures that may see trans-Tasman flights operating from domestic terminals and elimination of departure taxes and duplication of quarantine, customs and security checks.
The changes are expected to boost tourism between the two countries, which already see approximately 1 million visitors cross the Tasman each year in both directions. Under the proposals, passengers leaving Australia for New Zealand would not pay the A$47/$39.10 passenger movement charge and the countries would recognize each other's security, immigration and quarantine checks in a similar way to members of the European Union (EU).
Jetstar Airways (IMU) CEO, Bruce Buchanan said previously that common border arrangements could reduce fares by at least 30% on services from the east coast of Australia to New Zealand, where taxes and charges make up a large part of the fare. Tourism Australia, however, suggests a -20% reduction is more likely.
It is understood that passports still will be required and passengers will make a one-stop customs and immigration check at the departing airport in a similar way to the USA/Canada arrangement implemented six years ago.
(IMU) will launch four-times-weekly, Perth - Phuket service via Singapore from December 15.
September 2009: Qantas (QAN) is considering selling its 46.3% in Air Pacific (APC), Fiji's national carrier, in order to compete with the Virgin Group on routes to the tropical tourist destination. (QAN) applied to Australia's International Air Services Commission, the route regulator, for capacity to Fiji on behalf of its Jetstar Airways (IMU) subsidiary, but it would need to sell off its stake in (APC). An airline spokesperson confirmed that the (APC) stake was under review and it is understood that the Fijian government is amenable to the sale. (QAN) apparently has disappointed its partners by vetoing decisions that Fijians say would have helped the airline.
(QAN) wants to launch Jetstar (IMU) on the route next year, starting with Sydney - Fiji in April. Pacific Blue (PBI), Virgin (VAA)'s international arm in the region, started flying to Fiji from Brisbane in 2004 and since has started services from Sydney, Melbourne, and Adelaide. Virgin (VAA) has applied for an additional +1,260 seats for those routes and hopes to introduce its V Australia (VAZ) 777-300ERs. (QAN) has applied for 1,500 seats per week and the (IASC) has asked both airlines to justify the extra capacity. (QAN) plans to code share with both Jetstar (IMU) and Air Pacific (APC).
A321-232 (3717, VH-VWT), delivery.
October 2009: INCDT: A Jetstar Airways (IMU) A330-203 (CF6-80E1A2) (508, /07 VH-EBA) with 209 passengers and crew on board, suffered momentary erratic speed data indications from its computers in apparent bad weather and possible icing conditions on an October 29 flight from Tokyo Narita to the Gold Coast. The scenario bears similarities to that which investigators believe may have been a factor in the loss of an Air France (AFA) A330-200 over the Atlantic Ocean five months ago.
The pilots (FC) of Flight JQ12 remained in control when the situation occurred at 1:30 am Australian Eastern Daylight Time and the malfunction cleared after a few seconds. The pilots (FC) landed at the Gold Coast around 5 hours later and passengers reportedly were unaware of any problem.
An (IMU) spokesperson confirmed the incident and said the problem appeared to relate to the airplane's speed-sensing system, which involves pitot tubes and air data inertial reference units. "At this early stage, we don't know which component caused the problem," the spokesperson said. However, it was determined that icing of one of the pitot tubes is suspected strongly.
In the wake of the Air France (AFA) tragedy, Airbus (EDS) issued various directives to A330 and A340 operators relating to pitot tubes and suggested the replacement of at least two Thales (THL) probes with Goodrich (BFG) models). Both Qantas (QANH) and (IMU) A330s are fitted with Goodrich (BFG) tubes.
The Australian Transport Safety Bureau (ATSB) and the Civil Aviation Safety Authority are investigating the incident in conjunction with (QAN) and (IMU). The suspect pitot tube and several other components were replaced and checks made, and the airplane was ferried to Sydney to resume operations.
The (ATSB) still has not determined what caused a violent upset of a (QAN) A330 off Western Australia in October 2008, injuring 75. One of the airplane's (ADIRU)s sent erroneous data to the primary flight computer.
November 2009: SEE ATTACHED "AIRLINE BUSINESS" NEWS - - "IMU-NEWS-2009-11."
A330-202 (1061, VH-EBM), (CIT) Group (TCI) leased.
December 2009: One of the markets that Jetstar Airways (IMU) is focusing on for now is Faiji, which it will connect to Sydney for the 1st time in March with A320s. It will mark (IMU)'s 1st foray into the South Pacific. Earlier this month, (IMU) decided to re-enter the Cairns to Osaka market in April with A330-200s, building on its strong position in Japan. It previously suspended the route because of cost issues with Cairns airport. (IMU) also flies from Cairns to Tokyo, while also serving both Tokyo and Osaka form the Gold Coast near Brisbane. In the last quarter, (IMU)'s revenue on Japan routes increased by +20%.
(IMU) is also expanding on the domestic market, introducing 4 new A320s during the 1st half of next year. The profitable (IMU) said it would add A320s to its Singapore-based operation, Jetstar Asia (JSA) as well. This month, (JSA) begins its 1st Singapore to China flights to Sanya.
(IMU) will add +700,000 domestic seats and +77 new return flights in the 1st half of next year as it embarks on its biggest expansion since launching operations in 2004. (IMU) will add 5 A320 family airplanes over the next 6 months, taking its A320 family fleet to 46 as it boosts flights between Melbourne and Sydney and leisure destinations. Another 3 airplanes will be added to its Jetstar Asia (JSA) operation in Singapore. An 8th A330 will join the (IMU) fleet this month, followed by 2 more in 2010. An additional 7 A320s will be added in the 2nd half of 2010.
Qantas (QAN) subsidiary, Jetstar Airways (IMU) and AirAsia (ASW) "have entered discussions regarding a potential cost-saving joint venture," (QAN) said. An (IMU) spokesperson told "Dow Jones" that the companies are "looking at ways we can further cut costs through economies of scale" via cooperation on airport operations and procurement. "We both compete for passengers from a growing pool, and that clearly will remain." A source told "Dow Jones" that no cross-ownership is involved. Both airlines operate majority-A320 family fleets.
A320-232 (2457, VH-JQE) to Jetstar Asia (JSA).
January 2010: AirAsia (ASW) and Jetstar Airways (IMU) will announce a far-reaching joint venture that will involve a host of backroom functions and joint purchasing, although it is unclear if code sharing will be included in the partnership. Sources in Malaysia confirmed the pending announcement and said the cooperation between the region's 2 largest Low Cost Carrier (LCC)s will be extensive and will help both carriers contain fares and benefit from economies of scale. The unveiling in Sydney will be the culmination of talks that started in late 2008. Discussions between the 2 airline groups date back to 2004.
AirAsia (ASW) operates 129 routes to 65 destinations with 82 airplanes from hubs in Malaysia, Thailand, and Indonesia. Jetstar (IMU) has 49 A320s and A330s and operates 1,900 weekly flights to destinations in 15 countries. It announced a significant domestic expansion last month.
Jetstar Airways (IMU) will launch 2x-daily, Melbourne Tullamarine to Brisbane (BNE) flights on July 1. (IMU) currently flies 2x-daily between Melbourne Avalon and (BNE). (IMU) will begin 3x-weekly, Singapore to Shantou service on February 2. It said it would be the 1st foreign carrier to fly to the city in Guangdong province. Both new routes will be operated with A320s.
The later announcement unveiled an alliance that will bring together the Asia/Pacific region's leading Low Cost Carrier (LCC)s, allowing 2 carriers with combined annual turnover >$3 billion to reduce costs, pool expertise and maintain lower fares. The key to the agreement, which the airlines said was the 1st of its kind, is "a joint specification for the next generation of narrow body airplanes," according to (ASW) (CEO) Tony Fernandes. (ASW) and (IMU) also will look into joint procurement of airplanes. The existing combined fleets, plus orders and options, equate to nearly 400 planes, making the pair an extremely powerful voice in shaping the A320 and 737 replacements.
Qantas (QAN) (CEO) Alan Joyce said the historic non-equity alliance will give the duo a natural advantage in one of the world's most competitive markets. "(IMU) and (ASW) offer unmatched reach in the Asia/Pacific region, with more routes and lower fares than their main competitors, and this new alliance will enable them to maximize that scale," he told media in Sydney. "Just as both carriers have pioneered the development of the low-cost, long-haul airline model, today's announcement breaks the mold of traditional airline alliances and establishes a new model for achieving reduced costs and increased efficiency. This partnership will ensure that both airlines can capitalize on these growth opportunities," Joyce said.
Principal terms of the agreement cover future fleet specification, airport passenger and ramp services, shared airplane parts and pooling, procurement of engineering and maintenance supplies/services and reciprocal arrangements to mitigate possible operational disruption across both networks.
(IMU) (CEO) Bruce Buchanan said the carrier "is reducing its controllable costs by up to -5% annually" and the partnership will "enable a further step-change in our cost position and ensure sustainable low fares."
Fernandes hailed the agreement as another step in "the airline's strategy to maintain its global leadership as the lowest-cost airline operator. It is key for us to keep our costs as low as possible. This is what enables us to provide the low, low fares that our guests have enjoyed, and will continue to enjoy."
Centre for Asia Pacific Aviation Chairman Peter Harbison said the agreement could be the start of something bigger, with code sharing and equity exchanges at a later stage. "This is all about 'let's live together before we get married'," he mused.
International Aero Engines (IAE) announced a (V2500) SelectOne order from Jetstar Airways (IMU) worth up to $1.5 billion comprising engines for 50 A320 family airplanes plus 40 options and purchase rights. (IMU) also signed a $2 billion (IAE) Aftermarket Services agreement covering the newly ordered engines plus those already operating on 40 current airplanes. Rolls-Royce (RRC) said its share of the order was valued at up to $1.2 billion and Pratt & Whitney (P&W) said its share "could exceed" $1 billion, including the aftermarket agreement.
A320-232 (4178, VH-VGT), (CIT) Group (TCI) leased.
February 2010: A320-232 (4177, VH-VGY), (BOC) Aviation (SIL) leased.
March 2010: 2 A320-232s (4229, VH-VGV; 4245, VH-VGU), (BOC) Aviation (SIL) leased.
April 2010: A320-232 (4257, VH-VGR), (CIT) Group (TCI) leased.
May 2010: A320-232 (4303, VH-VGQ), (CIT) Group (TCI) leased.
June 2010: Jetstar (IMU) has picked Melbourne and Auckland as its 1st 2 long-haul destinations out of Singapore, with flights to Melbourne starting in December and to Auckland, in March 2011. (IMU) will operate the services using its new 303-seater A330-200 airplane.
Bruce Buchanan (IMU) (CEO) is confident the new services will do well. The Singapore to Melbourne route is a strong market, while Singapore to Auckland is currently under-served, with only Singapore Airlines (SIA) offering direct flights between the 2 points.
2 A320-232 (4343, VH-VGP; 4356, VH-VGP), ex-(D-AXAV) & (F-WWBH), Qantas (QAN) leased.
August 2010: Qantas Airways (QAN) has made key management changes at its low-cost arm Jetstar (IMU) to better position the airline for growth, particularly across the Asia-Pacific region. Bruce Buchanan moves from Chief Executive Officer of Jetstar (IMU) in Australia to Group (CEO) overseeing the family’s 2 other carriers: Jetstar Asia (JSA) in Singapore and Vietnam based Jetstar Pacific (PAH). The (CEO) of the Singapore operations, Chong Phit Lian will be responsible for the group’s investments and businesses in Asia, including building Singapore as a long-haul flying hub. Buchanan, whose main new role
is to drive expansion into new markets, said the plan is to
launch a new venture within the next 12 to 24 months.
Up to 4 new Indonesian airlines are expected to be given rights to fly from Indonesia to Australia after the 2 countries announced an increase of almost +50% in the weekly capacity to 14,800 seats. Indonesian carrier Batavia Air (BTV) announced it had been given rights to fly from Bali to Perth, Melbourne, and Sydney, while applications from Sriwijaya Ai (SRI), Mandala Airlines (MND) and Lion Air (MLI) are pending.
Australian-based Pacific Blue (PBI), Jetstar (IMU) and Strategic Airlines (STC), along with AirAsia Indonesia (AWR) and Garuda (GIA) already operate on the principal routes leading some analysts to suggest that too many airlines were being allowed to service the market. However, that market is growing at an unprecedented rate. Travel from Perth to Bali jumped +46% in 2009 with 463,352 passengers carried both ways and early figures point to another +50% increase this year.
Qantas (QAN) said it will boost domestic flights by almost +10% in response to growing demand, particularly from resource-rich Western Australia. The move comes a day ahead of Virgin Blue (VOZ) announcing a total revamp of its product offering to take on (QAN)’s vice-like grip on the country’s high-end business and corporate travel market.
According to (QAN) (CEO) Alan Joyce, (QAN) will add 65x-weekly, while low-cost carrier (LCC) subsidiary, Jetstar (IMU) will add 130x-. (IMU)'s domestic capacity will jump +30%. "We are seeing improved demand domestically, and the introduction of these additional services and aircraft will see the Qantas Group well placed to meet this demand," Joyce said.
Joyce said Qantas (QAN) would focus on the high-traffic east coast routes, the long-haul Sydney to Perth flight and legs in booming Western Australia.
October 2010: Jetstar (IMU) will significantly increase its New Zealand (NZ) domestic services by adding 39x-weekly flights between Auckland, Christchurch, Wellington, and Queenstown in February 2011.
(IMU) said it will add 2 A320s in New Zealand to facilitate the flights, which will expand its weekly services within (NZ) to 119, giving it a market share of around 20%.
Auckland to Christchurch flights will increase from 35 to 49 per week, while Auckland to Wellington services will increase from 21x- to 35x- weekly. Service between Christchurch and Wellington will double to 2x-daily. Service from Queenstown to Auckland will increase from 6x- to 10x-weekly flights. The additional services equate to an additional 717,000 seats per annum.
Jetstar Group (CEO) Bruce Buchanan said the “new services build upon Jetstar (IMU)’s growing competitive proposition on New Zealand’s high-traffic routes, providing a platform for future growth and new destinations.”
December 2010: Jetstar Airways (IMU) expects to add 2 new long-haul routes from its Singapore hub next year as it grows its fleet of A330s based at Changi Airport. (IMU) has now launched its 1st long-haul flights out of Singapore, with a service to Melbourne. (IMU) will begin operating on the Singapore to Auckland route from March 17 2011.
(IMU) is operating its eighth A330 on the Singapore to Melbourne route, and expects 3 more A330s to join the fleet in Singapore next year. The 1st will arrive by March before the commencement of the Auckland service, and another 2 will arrive in the 2nd half of the year. These airplanes have not been allocated to routes yet.
Jetstar Australia and New Zealand's (CEO) David Hall said the airline is studying new destinations from Singapore. "There are loads of opportunities out there, and we haven't decided on anything yet," he addeds. Besides adding more A330s, (IMU) also expects its 1st 787s to arrive in mid-2012. Hall said (IMU) has not been notified of any change in the delivery schedule by Boeing, despite recent delays to the 787 program. (QAN) has 50 787s on order and plans to allocate half of these to (IMU). In July, it said it had brought forward the delivery slots of its 1st 8 787s, which will be operated by (IMU) for international flights to Asia and southern Europe.
January 2010: (LAN) Airlines reached a bilateral interline agreement with Jetstar Airways (IMU) giving (LAN) network customers increased connectivity both within Australia and New Zealand and on international routes between the countries of Oceania and SE Asia.
Jetstar/Jetstar Asia (IMU)/(JSA)’s pilots (FC) remain unhappy with the airline’s aggressive recruitment in Singapore. In August, pilots (FC) issued a symbolic “no confidence” vote in Jetstar (IMU)/(JSA)’s management for “threatening employment of all Australian pilots (FC).” The airlines, owned by Qantas (QAN), said its pilots (FC) based in Singapore can earn better take-home pay than their Australian counterparts and that pilots (FC) based anywhere in the company can apply to work from the Singapore-base.
Qantas Group’s low-cost carrier (LCC) Jetstar (IMU) is upbeat about the prospects of investing in Indonesia but has no firm plans yet.
“Indonesia’s growing economy and success of (LCC)s in both Indonesia and the region certainly make the Indonesian domestic market an attractive one,” said Jetstar Asia (JSA)’s (CEO) Chong Phit Lian.
“Our commitment and our interest in market opportunities in Indonesia has a long history, with our acquisition of Valuair (VLU) in 2005,” said Chong, referring to a Singapore (LCC), Jetstar (IMU) bought because of its traffic rights into Indonesia. “In terms of Indonesian investments, we are committed to our existing level of services and ongoing assessment of market opportunities. We are also looking at a number of opportunities in Asia,” she added.
Chong was recently tasked with managing Jetstar (IMU)’s investments
in Asia and looking for new investments in the region. The Jetstar group also has Jetstar Pacific (PAH), a Vietnamese (LCC) and that country’s number 2 airline in size.
Jetstar (IMU) and its parent Qantas (QAN) have been eyeing Indonesia
as an investment opportunity for a number of years, but they have generally been quite wary because of concerns over corruption in Indonesia and that country’s poor safety record. The Qantas Group a few years ago was seriously looking at investing in Indonesian carrier Adam Air (DHI) but decided against it due to concerns over (DHI)’s safety practices. (DHI) closed, and its air operator’s certificate (AOC) was revoked in 2008 following a spate of safety incidents and a fatal crash.
This year, there will be more opportunities to invest in Indonesian carriers. The airlines there need to have enough capital to meet new rules that come into effect in January 2012, requiring all commercial carriers to have a minimum of 10 airplanes, of which five must be owned. This month, Mandala Airlines (MND) shuttered its operations
and is now seeking new investors to revive its operation. Kartika Airlines (KTK) and Riau Airlines are also looking for new investors.
February 2011: Air New Zealand (ANZ) will run a special 747 flight from Auckland to Christchurch in the South Island of New Zealand, which was devastated by an earthquake. (ANZ) is charging just NZ$50/$35 a seat and said that fare also applies to any service to and from Christchurch from any point in New Zealand to enable support staff and relatives to get in and people to be evacuated.
All airline services to Christchurch were suspended after the magnitude 6.3 earthquake hit at 12:51 pm local time. The event took out New Zealand’s Air Traffic Control (ATC) radar, which forced a 2-hour halt on all departures to and from the country.
Christchurch-based, (ANZ) (CEO) Rob Fyfe advised New Zealand Prime Minister John Key and Christchurch Mayor Bob Parker that the airline’s full resources are available to assist in the tragedy, for which the death toll stands at 75 as of press time, according to the Associated Press (AP).
Qantas (QAN), Pacific Blue (PBI), and Jetstar (IMU) are reviewing their operations to Christchurch and are expected to resume services.
Jetstar (IMU) launched an interline agreement across its group of airlines with Oneworld (ONW) alliance carrier, Finnair (FIN). The partnership allows (FIN) passengers to purchase a Jetstar (IMU), Jetstar Asia (JSA), Valuair (VLU) or Jetstar Pacific (PAH) flight as part of a single integrated transaction and travel itinerary and sold on a (FIN) E-ticket.
Strike action looms as Qantas (QAN) and its international pilots (FC) face off over job security and pay rates. (QAN) dismissed claims by the Australian and International Pilots Association (AIPA) that (QAN) flight deck crew job security is imperiled as “completely unfounded” while warning that the pilots (FC)’s wage requests are not viable.
(QAN) said in a statement that it has “not made a pilot (FC) redundant in almost 40 years and there is no threat to the job security of our pilots (FC).”
(QF) rejected (AIPA)'s demand that only Qantas (QAN) pilots (FC) be allowed to fly airplanes operated by other Qantas Group airlines such as its Low Cost Carrier (LCC) Jetstar (IMU). (QAN) pointed out that (IMU) is a separate company that is competing with other low-fare airlines (not with the premium service offered by (QAN)).
Outspoken (AIPA) President Barry Jackson told Australian media that (QAN) management is seemingly eager to destroy its relationship with loyal workers. “We are witnessing the demise of an icon through mismanagement,” he charged. “This is not the first time some of the (QAN) managers have been through this. This dispute is about jobs and whether there will be a recognizable aviation industry based in Australia in the future.” Jackson also warned about job security at (IMU). “It [(IMU)] is now being undercut and off-shored at every opportunity, with the imminent formation of more off-shore bases.”
Jeppesen reached a 5-year contract renewal with Jet Airways (IMU) to continue providing its electronic flight bag (EFB) tailored digital charting and navigations service solutions to (IMU), as well as to its subsidiaries, Jetlite and Jetkonnect. The agreement includes Jeppesen FliteDeck Pro class 2 (EFB) services with an enroute situational awareness application, tailored digital charting services and NavData navigational information.
March 2011: Jetstar (IMU) reportedly is planning to enter the Japanese domestic market through a joint venture (JV) with local investors, according to the "Yomiuri" newspaper. During the Japan Airlines (JAL)/(JAS) reconstruction last year, Oneworld (ONW) alliance partner Qantas (QAN) provided information and the potential of the Jetstar (IMU) model in the Japanese domestic market with an offer to set up the Low Cost Carrier (LCC) as part of (JAL)/(JAS)’s new structure. This offer was turned down owing to union pressure.
June 2011: Airline operations in Australia and New Zealand were thrown into chaos by ash from Chile’s Puyehue-Cordon Caulle Volcano eruption.
SEE PHOTO - - "IMU-2011-06-CHILE VOLCANO ERUPTION."
Qantas (QAN) and Jetstar (IMU) canceled all operations from Melbourne, Tasmania and to and within New Zealand on Sunday, June 12 and Monday June 13, while other airlines limited operations in the affected areas. The ash cloud now stretches almost around the globe in the roaring forties latitudes and is located at altitudes of between 6,000 m and 10,600 m/19,680 ft to 32,800 ft. It temporarily grounded air service to, from and within Argentina the previous week.
In contrast to the Australian airlines, Air New Zealand (ANZ) and most international airlines said they would continue operating normally, flying either above or below the cloud or flying longer routes to avoid it where required. Puyehue began erupting June 4, with the initial ash plume reaching above 15,240 m.
More dense ash areas to the south and west are expected to affect airline operations in Australia over the next week. New Zealand’s Civil Aviation Authority and Australia’s Civil Aviation Safety Authority are monitoring the cloud in conjunction with both countries' volcanic ash centers and weather bureaus.
Airservices Australia and New Zealand’s Airways are also involved, liaising with airlines to develop new flight routes around the cloud. Decisions on whether or not flights will operate are being made by individual airlines and operators, Airservices said. “The airlines will make decisions on how flights operate based on a careful assessment of all the information,” a spokesperson explained.
July 2011: "Nikkei Business Daily" reported that Japan Airlines (JAL)/(JAS) will team up with Australia's Jetstar Airways (IMU) to create a new Low Cost Carrier (LCC).
(IMU) will launch daily, A330 Melbourne to Singapore to Beijing service on November 24 and 4x-weekly, A320 Singapore to Hanoi on December 15.
Jetstar Asia (JSA) announced new daily, A330 Melbourne to Beijing service via its Singapore hub from November 24; Beijing will be (JSA)’s 9th mainland China destination.
Jetstar Asia (JSA) will add 5 A320s and 2 A330s to its Singapore (SIN) hub by year end, resulting in an additional 40x-weekly flights. Among the extra services are flights to new destinations, including 3x-weekly, A320 (SIN) to Ningbo service from September 9 and 4x-weekly, A320 (SIN) to Hanoi service from December 15, as well as the new daily flight to Beijing announced earlier this month.
(JSA) will also launch additional flights to Taipei, Hong Kong, Kuala Lumpur, Ho Chi Minh City, and Jakarta.
By year end, Jetstar Asia (JSA) will have 17 A320s and 4 A330s based at (SIN), which represents almost +200% growth at the airport since 2009. At year end, Jetstar (IMU)'s network, including Australia, will feature >3,000 flights per week to >60 destinations across 17 countries. Its fleet will number 86 airplanes.
August 2011: Qantas (QAN) low-cost carrier (LCC) subsidiary, Jetstar Asia (JSA) is expected to set up an airline in Japan as the demand for cheaper travel sweeps across Asia. The new carrier will be a partnership between Jetstar Asia (JSA), Japan Airlines (JAL)/(JAS) and the Mitsubishi Corporation.
The yet-to-be named airline will be launched at the end of 2012 and will be based at Tokyo Narita. The most likely name will be "Jetstar Japan," or simply "JJ."
According to sources in Australia, Mitsubishi will own 33.4% and (JAL)/(JAS) and Jetstar (IMU) will hold 33.3% each.
Discussions surrounding a (LCC) partner for (JAL)/(JAS) date back to January 2010 when (JAL)/(JAS) entered into a government-supervised bankruptcy restructuring. The (LCC) was touted as part of the reconstructed (JAL)/(JAS).
However, in October last year, (JAL)/(JAS) Chairman Kazuo Inamori appeared to pour cold water on a (LCC), telling media he had reservations about delving into (LCC) operations. "I think we should refrain from chasing after scale expansion," he said. "Look at the USA example, where many low-cost carriers (LCC)s that entered the market have since exited."
(QAN)/(IMU)/(JSA) has selected for the 1st time, A320 airplanes to launch its new premium airline to service routes to/from Australia and the Asian region. In addition, Jetstar (IMU)/(JSA) has selected the A320 to continue its growth in Australia and Asia. The commitment to order a minimum of 106 A320 Family airplanes includes 78 A320neo jets.
October 2011: The Qantas (QAN) Group's low-cost carrier (LCC) subsidiary, Jetstar Japan has named Miyuki Suzuki as (CEO) of the recently launched joint venture (JV) airline. Jetstar Japan is a partnership between the Qantas Group, Japan Airlines (JAL)/(JAS) and the Mitsubishi Corporation. Suzuki, a Japanese national with 30 years of Information Technology (IT) and telecommunications experience across the Asia Pacific region, will start his job on December 1st.
Jetstar Japan, which hopes to begin operations by the end of 2012, will have a fleet of new A320s, configured for 180 passengers. The fleet will grow to 24 airplanes within the 1st few years. Initially, the (LCC) will fly domestically with short-haul international flights expected to start in 2013. It will announce domestic destinations by mid-2012, to possibly Sapporo, Fukuoka, and Okinawa.
Qantas (QAN) and Airbus (EDS) have finalised a contract for 110 A320 Family airplanes, to help with the airline’s fleet renewal and expansion plans in the coming years. The firm order for 78 A320neo and 32 A320s is the largest single order in Australian aviation history by airplane units and follows a commitment signed in August.
“The A320 will be the launch airplanes for (QAN)’s new, premium airline based in Asia and will support Jetstar (IMU)’s expansion plans – including the establishment of Jetstar Japan,” said Alan Joyce (QAN) (CEO). “The A320 Family’s outstanding operational efficiency and comfort, plus its environmental credentials, make it the right choice for the Qantas Group.”
November 2011: Jetstar Airways (IMU) became the 1st airline to hand out iPads to its passengers for in-flight entertainment. The iPads were launched on selected Jetstar (IMU) flights and will be rolled out across the Australian domestic, transTasman and short-haul international services from Australia and New Zealand, in the coming weeks. According to (IMU), the iPad rental will cost from $10 to $15 per flight on flights >2 hours and will allow passengers to view the latest release movies, TV shows and music, and a line-up of the latest generation games, e-magazines and e-books.
(IMU) said it will initially roll out 3,000 iPads with plans to increase this number once they are placed on Jetstar (IMU)’s Asia network.
January 2012: JetStar Asia (JSA) isn’t just busy in Singapore. It also has new service operating between Sydney and Wellington, part of a trans-Tasman market now contested by another Virgin Australia (VOZ) joint venture (JV), this 1 with its part owner Air New Zealand (ANZ). In the meantime, (JSA) and its partner Japan Airlines (JAL)/(JAS) applied for their license to launch Jetstar Japan from Tokyo (NRT) and Osaka (KIX) at the end of this year. It says it’s talking to airports in Sapporo, Fukuoka, and Okinawa, and intends to serve points in China and South Korea in 2013.
February 2012: Jetstar Japan is a partnership between the Qantas Group (QAN), Japan Airlines (JAL)/(JAS) and Mitsubishi Corporation. Last year, (QAN) finalized a contract for 110 A320 family airplanes for (QAN) subsidiary, the Jetstar Group in Australia and Singapore and Jetstar Japan.
Jetstar Group (CEO) Bruce Buchanan said past experience with Japan puts Jetstar (IMU) in a good position. “Serving the Japanese customer for the past 5 years with international services gives us a clear advantage in rolling out a domestic network,” Buchanan said.
Jetstar Japan (CEO) Miyuki Suzuki said Jetstar Japan was preparing for strong customer demand when fares to its 1st 5 destinations go on sale. “In a country that’s never had a true low fares domestic network, the ability to travel for an average of -50% less will open up new places and opportunities,” Suzuki said.
March 2012: A new interline agreement between India's Jet Airways (JPL) and low-cost carrier (LCC) Jetstar (IMU)/(JSA) is a significant development for the 2 carriers and their respective markets. (JPL) on a single ticket will be able to sell across Jetstar (IMU)/(JSA)'s network from Singapore, which predominantly includes points in SE and E Asia (where Jet Airways (JPL)'s network is thin) as well as Australia and New Zealand, where traffic flows to India may shift in the short/medium-term as Air India (AIN)/(IND) looks to commence direct flights and Virgin Australia (VOZ) works with new alliance partner Singapore Airlines (SIA).
The agreement further evolves Jetstar (IMU)'s hybrid model as Jet Airways (JPL) passengers, like those of select Oneworld (ONW) Alliance carriers, will receive checked luggage and, on long-haul flights, meals and comfort kits on Jetstar (IMU)/(JSA) flights as part of their ticket whereas other passengers have to pay separately. While this adds complexity and some are sceptical of (LCC)s moving away from a stripped-down model, blurring the lines and adding complexity is rational when yields and network enhancements outweigh the additional cost.
April 2012: The Qantas Group has selected (CFM) International (LEAP-1A) engines for the 78 A320neo airplanes it has on order. (CFM) valued the deal at $2 billion including spare engines.
(QAN) and Airbus (EDS) last year finalized the single largest commercial airplane order in Australian history with a contract for 110 A320 family airplanes including the 78 re-engined units. Airlines can also choose (Pratt & Whitney) (PRW) (PW1100G) engines to power A320neos.
“The (LEAP) engine was chosen because of its performance, fuel efficiency and maintenance program," (QAN) (CEO) Alan Joyce said, adding that the 1st of the A320neos, to be delivered in 2016, are targeted for subsidiary Jetstar (IMU).
May 2012: The Qantas Group (QAN) will increase capacity on (QAN), Jetstar (IMU) and QantasLink (NJS) domestic routes in 2012 to 2013 to strengthen its network in the business and leisure markets.
Changes include upgrading airplanes and adding more frequencies, including extra services during peak times on business routes between Sydney (SYD), Melbourne (MEL) and Brisbane (BNE). It will also reintroduce 747 services on the (SYD) to Perth (PER) route.
Adding more A330 services on the (MEL) to (PER) route will increase capacity in the east-west market, according to (QAN).
Jetstar (IMU) will increase capacity in key leisure markets and QantasLink (NJS) will increase capacity across Queensland with the introduction of Fokker F 100 services between (BNE) and Emerald, complementing Bombardier Dash 8-Q400 services and providing cascaded growth in key regional markets.
These measures will ensure that the Qantas Group maintains its profit-maximizing 65% market share, while retaining the flexibility to adjust planned capacity growth according to market conditions.
(IMU) and JetStar Asia Airways (JSA) plan to 1st deploy the new 787-8s being delivered in August 2013 on their routes from Singapore Changi International (SIN) to Auckland International (AKL), Beijing Capital (PEK) and Melbourne Tullamarine International (MEL) airports.
July 2012: International Aero Engines (IAE) announced that Jetstar Airways (IMU), a wholly owned subsidiary of the Qantas (QAN) Group, has selected (IAE)'s (V2500) engine to power a further 32 A320 family airplanes.
A320-232 (5211, VH-FVP), ex-(F-WWBN), Qantas (QAN) leased.
September 2012: Jetstar Airways (IMU) now operates in Australia, New Zealand, Singapore, Vietnam and (starting next year) Hong Kong.
AirFrance - (KLM) has partnered with Jetstar Airways (IMU) to offer daily 1-stop flights between Australia's Gold Coast region and Europe via Japan. Under the partnership, passengers can fly with (IMU) from Coolangatta to Tokyo or Osaka, and connect on AirFrance (AFA)'s services to Paris or (KLM) Royal Dutch Airlines' services to Amsterdam.
"From Australia, our group already offers >500 departures per week through code share or commercial partnerships with a range of airlines," said Tom Reeves (AFA) - (KLM)'s Regional Manager Australia & New Zealand.
Jetstar (IMU) will add a ninth A320 to its New Zealand fleet on 15 November, allowing it to increase services between New Zealand's 3 largest cities, while raising flight frequencies from Australia to Queenstown. (IMU) will add up to 36x-weekly flights to domestic and trans-Tasman services, which will increase capacity by up to 50,000 seats monthly.
It will add 20x-weekly flights on the Auckland to Wellington route and another 7x- from Auckland and Wellington to Christchurch, starting November 15. In addition, (IMU) will add 4x- services on the Melbourne to Queenstown route and 3x- services on the Sydney to Queenstown route to spur inbound tourism. This new schedule will provide 131,000 additional seats on flights into Christchurch.
"These changes affirm our commitment to New Zealand and will contribute significantly to the country's tourism industry, providing economic benefits as well as contributing strong job growth. Today, Jetstar (IMU) holds 20% of the domestic flying market and employs >500 Kiwi team members," David Hall (CEO) of Jetstar Australia and New Zealand said.
Additionally, (IMU) will cancel its 5x-weekly service on the Christchurch to Queenstown, New Zealand route. (IMU) will also reduce services on the Christchurch to Gold Coast and Christchurch to Melbourne routes by 1 flight weekly, and will operate 3x-weekly and daily flights respectively on the routes.
November 2012: Jetstar (IMU) inaugurated a new route from Jetstar Asia (JSA)’s Singapore (SIN) base to that of its recently launched sister company Jetstar Japan, Osaka Kansai (KIX), from where passengers can continue onto domestic flights to 4 destinations within Japan (including Okinawa, which only launched last month). 3x-weekly A330-operated departures are offered to begin with, although this number will increase to 4x- in mid-December. (IMU) will face competition from Singapore Airlines (SIA)’s 11x-weekly flights.
December 2012: Jetstar Airways (IMU) returned on the 8,900 km route from Melbourne (MEL) to Honolulu (HNL) on December 14, following a spike in Hawaii’s appeal as a holiday destination for Australians. (IMU), which previously operated the route from December 2006 to October 2007, initially offers 2x-weekly A330-200-operated flights to the Hawaiian destination, but plans to add a 3x-weekly frequency.
January 2013: A major overhaul of Qantas (QAN)'s international operations is going to have serious ramifications for the other big players in Australia's long-haul markets next year. The most significant change will see (QAN) partnering with Emirates (EAD), giving the pair a more dominant position in the highly contested Australia to Europe market. The link-up will enhance (QAN)'s network into Europe but will make life more difficult for carriers, such as Singapore Airlines (SIA), that draw a lot of revenue from the so-called "Kangaroo" routes. 2013 will also be important for (QAN) low-cost carrier (LCC) subsidiary, Jetstar (IMU), which is due to take delivery of the 1st of its 15 787-8s.
February 2013: The Qantas (QAN) Group posted a 1st-half net profit of +A$111 million/+$114.6 million, >2x- the +A$42 million in the year-ago period. The Group’s 1st half ended December 31, 2012.
The results included an A$125 million payment from Boeing (TBC) as part of changes to (QAN)'s 787 orders announced in August 2012. (QAN)
(CEO) Alan Joyce said the Group was delivering against all its strategic goals. “During the 2013 first-half, we increased underlying profit by +10%, announced a global aviation partnership with Emirates (EAD), launched Jetstar Japan (JJP), reinforced our position in the Australian domestic market, reduced comparable unit costs by -3%, announced the early repayment of $650 million in debt, commenced a share buy-back and sold non-core assets,” Joyce said. “In total, the Group achieved A$172 million in transformation benefits in (1H) 2013. The operating environment remains complex and volatile, but we are now beginning to realize the benefits of the tough decisions that we have made over the past 18 months.”
1st half revenue was A$8.2 billion, up +2.4% compared to the year-ago period. All operating segments were profitable except Qantas International (QAN), which reported an underlying (EBIT) loss of -$91 million in the 1st half, a +65% improvement of a -A$171 million loss year-over-year.
Jetstar (IMU) reported underlying (EBIT) of A$128 million, down from $147 million year-over-year, reflecting domestic market conditions and start-up investments in Jetstar Japan (JJP) and Jetstar Hong Kong (JHK). “Jetstar (IMU)’s revenues increased by +12%, as it positioned itself for a new phase of growth,” Joyce said.
“Jetstar Japan (JJP) commenced domestic operations in July and has made a strong start (with >600,000 passengers carried in its 1st 6 months). Singapore-based, Jetstar Asia (JSA) continued to grow, with an improvement in profitability, while the performance of Vietnam-based Jetstar Pacific (PAH) is also improving after an ownership restructure and fleet renewal program,” said Joyce.
He added, “Jetstar Hong Kong (JHK)’s application for regulatory approval is well underway, and though we do not take the outcome for granted, we believe there is a compelling case for a new low-cost carrier (LCC) in this market.”
Jetstar Hong Kong (JHK) has appointed Edward Lau as its (CEO), effective from February 18. Lau will join (JHK) from (TNT) (TNB), where he served for >10 years, holding senior positions across the company and most recently, Managing Director for Hong Kong. He has 35 years of experience in transport, logistics, freight and aviation, and previously worked for the Hay Group and Rosenbluth International.
Jetstar Hong Kong (JHK) plans to launch in mid-2013, subject to regulatory approval, and intends to grow to a fleet of 18 A320s by 2015.
March 2013: Australia’s 6th largest city, Gold Coast, located 94 km south of the Queensland capital Brisbane, is famous for its beaches, sub-tropical rainforest, theme parks, nightlife and shopping, and is directly accessible from 9 domestic and 6 international cities via Gold Coast Airport, which is also the 6th-largest in the country.
Passenger numbers have grown from 2.2 million in 2003 to >5.6 million last year, making it the fastest growing airport in Australia in the last decade. Over this period, a passenger volume decrease was noted only once, in 2011 (-4%), with growth quickly restored in 2012, resulting in a traffic increase of +7% over the preceding year. Examination of the early capacity data for 2013 shows that the airport is set to break through the 6 million mark this year.
While Gold Coast’s Airport’s monthly passenger movements show a fair amount of fluctuation (akin to the region’s world-famous waves), the airport has made some progress in reducing monthly variance from 34% in 2011 (between peak month of January and low month of June) to 29% recorded in 2012 (December versus May). However, this indicator remains much higher than that of the similarly sized Adelaide, where monthly traffic variance of only 13% was found. The limited presence of full-service carriers at Gold Coast (only 10% of total weekly departures) leaves the airport prone to the more seasonal nature of low-cost services, making the flattening of the seasonality profile more difficult.
2 home-grown low-cost carriers (LCC)s account for >80% of weekly seats available at Gold Coast. While the dominance of the market from Gold Coast by the Qantas Group-owned Jetstar (IMU) and Virgin Australia (VOZ) has been somewhat reduced from 92% a decade ago, to around 80% in April 2013, strong rivalry between the 2 carriers persists. Indeed, Virgin Australia (VOZ)’s entry into the market in 2002 posed a formidable threat for Qantas (QAN), which in 2005 went on to replace most of its capacity at the airport with Jetstar (IMU)-operated services.
SEE ATTACHED - - "IMU-GOLD COAST TOP 8 - 2013-03."
Tiger Airways Australia (TAU) is the carrier which has added the most capacity over the course of last year, although it handles considerably lower traffic volumes than the 2 leading carriers. Examination of "Innovata" data shows that (TAU) will provide twice as many flights in April 2013 than it did a year before.
Qantas (QAN) has also reacted, and after a 3-year break, it is returning to the Sydney to Gold Coast city pair with 3x-daily operations. In addition, Jetstar (IMU) responded by adding +8% to its capacity on the route. As a result, as much as +30% more seats are offered overall in the market from Gold Coast to Sydney this April as compared to the preceding year, accounting for a half of total scheduled capacity from the airport.
Even though +26% more international seats are offered in April 2013 compared to the same period last year, this segment only accounts for 14% of the airport’s traffic. Gold Coast’s 1st long-haul route was AirAsia X (ASX)’s Kuala Lumpur service, launched back in 2007. A total of 4 long-haul routes are currently offered at the airport. The latest long-haul arrival is Scoot (SCT), with its offering to Singapore, which after only 10 months of operation has become the #1 in the long-haul market from Gold Coast.
May 2013: SEE ATTACHED "AIRLINER WORLD" MAGAZINE UPDATE - - "IMU-2013-05 - A/B/C/D/E/F/G/H/I."
The Jetstar (IMU) Group is preparing to increase its presence in the booming Indonesia market with additional services from its Singapore hub. The expansion follows several years of relatively flat capacity to Indonesia for Jetstar Asia (JSA), while its Low Cost Carrier (LCC) competitors have pursued rapid growth.
(JSA) faces challenges as it tries to catch up on several years of missed opportunities in the Indonesian market. The group may struggle to compete with larger players, most of which are also pursuing rapid capacity expansion. (JSA) lacks an Indonesian affiliate, making it difficult to sell in the local Indonesian market, which remains heavily dependent on travel agents.
But the opportunities in Indonesia are too humongous for the usually conservative (JSA) to pass up. It needs to make a push or risk being shut out entirely in 1 of the largest and fastest growing markets in Asia.
June 2013: A320-232 (5631, VH-VFO), ex-(D-AUBQ), delivery.
August 2013: Qantas (QAN) intends to add 100 jobs in Melbourne for 787 Maintenance Repair & Overhaul (MRO) and training.
The Qantas Group will establish a Maintenance & Training facility for subsidiary, Jetstar Airways (IMU) in Melbourne, as (IMU) prepares to take delivery of its 1st 787 airplane.
Qantas (QAN) said a flight simulator will be installed at the group's flight training center in Airport West, where it will also house a replica of the 787 cabin door, to be used for crew training.
With the facility, the company expects to create up to 100 jobs including cabin crew (CA) trainers, simulator instructors and engineers (MT).
Jetstar (IMU) is also leasing a wide body hangar from the group, which will undertake line maintenance of the 787. The facility is now being fitted out with the required equipment and tooling.
There are 48 engineers (MT) and 10 pilots (FC) who have already completed their 787 training, and more training is currently under way, said Jetstar (IMU) Group (CEO) Jayne Hrdlicka. "Our cabin crew (CA) will be the next group of (IMU) team members to be trained to operate on the 787 using our dedicated facilities at Airport West," she added.
Jetstar (IMU) has 14 787-8s on order. It is scheduled to receive the 1st airplane (36202, VH-VKA) in September. This will be followed by another 2 787s in November and December (36203 and 36204).
September 2013: Cathay Pacific Airways (CAT) has filed a formal objection to the application for an air transport operating license by Qantas (QAN) low-cost carrier (LCC) subsidiary, Jetstar Hong Kong on the grounds it is not a Hong Kong-based airline. Jetstar Hong Kong Chairman, Pansy Ho has defended the carrier’s license application in response to objections from local carriers.
October 2013: Jetstar Airways (IMU) has launched its first ever flights to Lombok (LOP) in Indonesia. The rapidly developing tourism destination, which is 150 km east of Bali, will be served four times weekly from Perth (PER) in Western Australia, using (IMU)’s A320s. It becomes the airline’s fifth destination in Indonesia. Jetstar (IMU) (CEO) David Hall, said: “As more holiday-makers have the opportunity to experience Lombok, with its pristine beaches and natural attractions, we expect it will quickly become one of the most popular destinations in our network.” The new airport serving Lombok opened on October 1st 2011.
Boeing (TBC) and Jetstar Airways (IMU) celebrated the delivery of (IMU)’s 1st 787-8 - - SEE PHOTO - - "IMU-2013-10 - 1ST 787" on October 7, which is also the 1st 787-8 Dreamliner for Australia. “Today is a historic milestone for the Qantas Group and Jetstar (IMU) as we welcome the most advanced passenger airplanes ever constructed to the fleet,” said Qantas Group (CEO) Alan Joyce. “In just 10 short years, (IMU) has grown to be the largest low fares carrier in the Asia Pacific, carrying >100 million passengers. The 787 will set up (IMU) for another decade of growth.”
Jetstar (IMU)’s 787 Dreamliner departed Monday morning October 7th from Boeing (EDS)’s Everett, Washington delivery center en route to Melbourne, Australia where the plane will be greeted by (IMU) employees and special guests.
“Jetstar (IMU) customers will have the chance to fly in a larger and more spacious cabin, enjoy gate to gate in-flight entertainment and arrive at their destination more refreshed thanks to a lower cabin altitude to reduce the impact of jet lag,” said Jetstar Group (CEO) Jayne Hrdlicka. “The entire Jetstar (IMU) team is very excited to have the 787 take to Australia skies.”
Jetstar (IMU) plans to initially use its 1st 787-8 on domestic flights from Melbourne to Coolangatta/Gold Coast and Cairns from November 13 to December 16 before being deployed on its 1st international services to Denpasar.
November 2013: Jetstar (IMU) begins domestic Boeing 787 service November 13 with international service beginning December 18 to Bali. The 787 begins domestic service Melbourne to Gold Coast and to Cairns. (IMU) is expected to have +2 787s by the beginning of 2014. (IMU)’s 787s will feature 21C business class and 314Y economy seats.
December 2013: Low-cost carrier (LCC) Qantas (QAN) subsidiary, Jetstar (IMU) will establish a new cabin crew and pilot (FC) base in Adelaide next year to help it increase its presence in S Australia.
The move will create up to +120 jobs (including 40 pilot (FC) positions, 70 cabin crew (CA) and a dozen ground staff (MT). (IMU) will also base 4 A320s in Adelaide (3 to be relocated from Darwin and the 4th from Melbourne) from March 31, 2014.
Jetstar Australia & New Zealand (CEO) David Hall said the time is right to expand (IMU)’s presence in S Australia and provide extra services from Adelaide. “Our presence in Adelaide has >2x- in the past 4 years and we believe the establishment of a dedicated crew base will provide a solid foundation to continue to grow low fares from the capital of S Australia. Basing 4 airplanes at Adelaide will allow us to expand our schedule,” Hall said.
Jetstar Airways (IMU) launched low-cost services between Adelaide (ADL) and Auckland (AKL), using its ubiquitous 177Y-seat A320s on the 3,259 km sector. The 3x-weekly operation, which began on December 16th, will face legacy carrier competition in the form of Air New Zealand (ANZ), with its own daily flights. 2 days earlier on December 14th, (IMU) also commenced A330-200 services between Melbourne (MEL) and Phuket (HKT). The 2x-weekly operation, flown on Saturdays and Sundays, will face no direct competition.
Jetstar (IMU) operates some 88 domestic services a week and international services to Bali and Auckland from Adelaide.
(IMU) will operate its new 787 Dreamliners to Bali and Phuket from Sydney and Brisbane starting next year. (IMU) has been flying its new 787s on domestic routes, with its 1st international service to Melbourne to Bali starting December 18th.
Next year will see an expansion of international operations with the airplane types, with flying from Brisbane to Bali from April, a new direct service for (IMU). From January, a 787 Dreamliner will start flying from Sydney to Bali, while it will start servicing Phuket in January.
(IMU) will also take the 787 from Melbourne to Auckland next year, but only on for a month during February and March. (IMU) has already taken delivery of 2 787 Dreamliners, with a 3rd joining the fleet in the New Year.
2 787-8S (36228, VH-VKB; 36229, VH-VKD), Qantas (QAN) leased.
February 2014: Emirates (EAD) and Jetstar Airways (IMU) have launched a code share and frequent flyer agreement opening up destinations in Australasia and Asia. (EAD)’s code will now be placed on a number of routes operated by Jetstar Airways (IMU) in Australia and New Zealand, and by Jetstar Asia (JSA). Passengers will now have access to 27 new routes and 6 new destinations such as Bali in Indonesia, Byron Bay in Australia, Dunedin in New Zealand, and Siem Reap in Cambodia.
They include 7 domestic routes in Australia, 4 in New Zealand, 6 new routes between Australian and New Zealand, and 10 international routes out of Singapore to Indonesia, Cambodia, Vietnam, Malaysia, Thailand, and Hong Kong.
Members of Emirates Skywards, the airline’s frequent flyer program, will also be able to earn miles for flights on Jetstar (IMU)-operated routes, which have the Emirates (EAD) code.
Emirates Airline (EAD) will start code sharing on selected Jetstar (IMU) and Jetstar Asia (JSA) services from April 6th. (EAD) will place its code on 18 routes operated by Jetstar (IMU) in Australia and 10 operated by Jetstar Asia (JSA). As a result, (EAD) will add 6 more cities to its network via the code share, while "Emirates Skywards" loyalty scheme members will be able to earn miles on Jetstar (IMU)/(JSA) services. “This agreement will see us bring our extensive Asia Pacific network consisting of some of the most popular leisure destinations, to the doorstep of (EAD) passengers across the globe,” said Jetstar Group Chief Commercial Officer Lisa Brock.
(EAD) already has an extensive international alliance with Jetstar (IMU)/(JSA)’s parent airline Qantas Airways (QAN). (EAD) had indicated in December 2012 that a code share and interline arrangement with (IMU) and (JSA) was being looked at as part of that alliance.
April 2014: Jetstar Airways (IMU) has made Brisbane (BNE) its 6th Australian city, after Sydney, Melbourne, Perth, Darwin, and Adelaide, to receive a link to Denpasar (DPS) in Bali, Indonesia. The 4x-weekly, 787-8-operated service was launched on April 16th. The 4,488 km sector will face competition from Virgin Australia Airlines (VOZ) (10x-weekly) and Garuda Indonesia (7x-).
Jetstar Hong Kong (based at Hong Kong Chep Lap Kok airport) could take on yet another local Hong Kong-based investor in a bid to satisfy revised local shareholding requirements needed to secure its Hong Kong Air Operator's Certificate (AOC), Air Services Licence (ASL) and necessary designation.
Following resistance to an initial licence application by founders Qantas (QAN) and China Eastern Airlines (CEA) in 2013, Shun Tak Holdings, a shipping and property conglomerate in Hong Kong and Macau founded by Macau casino tycoon Stanley Ho, was taken on board as a new 33% local investor. However, Australia's "The Age" newspaper claims Shun Tak's 33% shareholding may not be sufficient forcing Jetstar (IMU) to consider taking on yet another local investor.
On the back of the report, Cathay Pacific (CAT) has reiterated its opposition to (IMU)'s licensing on the grounds that even with a >51% local shareholding, (IMU) would still not meet Hong Kong's constitutional law requirements.
May 2014: Jetstar Airways (IMU), has started its 3rd service to Tokyo Narita (NRT), adding flights from Melbourne (MEL) to its existing operations from Cairns and Gold Coast airports in Australia. Launched on April 29th, the 4x-weekly service will be operated by (IMU)’s 303-seat A330-200s. Jetstar (IMU) will face no direct competition on the city pair.
Nearly 6 months since Australia mandated the use of Automatic Dependent Surveillance-Broadcast (ADS-B), >97% of domestic and international airline flights in Australian airspace >29,000 feet (flight level 290) are being conducted using (ADS-B) surveillance, according to air navigation services provider, Airservices Australia.
The 1st (ADS-B) fitment mandate became effective December 12, 2013 for all Instrument Flight Rules (IFR) flights at or >29,000 ft in Australian airspace. On February 6, 2014, the Civil Aviation Safety Authority (CASA) required all new (IFR) airplane registrations in Australia to be (ADS-B) capable, as well as all new transponder installations in older (IFR) airplanes.
As of January 6, 2016, all (IFR) airplanes operating within 500 nm to the N and E of Perth, Western Australia, will be required to be fitted with (ADS-B). By January 6, 2017, all Australian registered (IFR) airplanes flying within Australia’s airspace will be required to operate using (ADS-B).
Australia has a network of 61 (ADS-B) ground stations providing continent-wide air traffic control surveillance. Over the next three years, Airservices will install a further 15 (ADS-B) ground stations to provide additional surveillance coverage at lower altitudes and extend higher level coverage offshore.
Airservices Australia said the aviation industry has “strongly supported (ADS-B), with Australia’s major airlines and operators, including a number of international and regional airlines, embracing the new technology by investing in the installation of (ADS-B) equipment into their airplanes.”
July 2014: Jetstar Airways (IMU) has started 2 domestic routes, with Melbourne (MEL) and Gold Coast (OOL) benefitting from new connections. Starting on June 28th, the latter is now linked to Mackay (MKY) in N Queensland with a daily service, and becomes (IMU)’s 9th destination from the airport. From Melbourne, (IMU) offers Ayers Rock (AYQ) 4x- weekly from June 29th. Both services face no direct competition and are operated by (IMU)'s 180Y-seat A320s.
Currently Australia’s 7th largest airport, which according to its own website is ‘connecting the world to the Great Barrier Reef,’ Cairns Airport clearly bats above average, as the city of Cairns is only the 14th largest (according to the Australian Bureau of Statistics) in the country. The tropical climate and its proximity to 1 of the 7 natural wonders of the world clearly act as a passenger traffic magnet for the airport.
As recently as 2006, Cairns was the 6th largest airport in Australia, but it was overtaken by Gold Coast Airport (which is situated less than 1,500 km down the Queensland coast) in 2007 (positions that both airports still maintain today). Referring to Cairns’ May traffic statistics, which also covers the 11th month of its current financial year, the airport looks set for marginal growth in Fiscal Year (FY) 2014, with +3% growth recorded in the year-to-date. On this basis, it is relatively sure that it will break the 4.5 million passenger barrier for the 1st time in its history.
The big structural change in the airport’s traffic mix is the increasing proportion of domestic passengers as a share of the total figure. In (FY) 2005, domestic traffic represented 67.8% of passengers, however, so far in (FY) 2014 this sector commanded 85.6% of annual throughput. Indeed, during the last 12 months, the airport has lost its 2x-weekly China Eastern Airlines (CEA) service to Shanghai, which has exacerbated this trend.
Commenting on this route loss, airport (CEO) Kevin Brown said: “There has been strong growth in the number of Chinese people visiting Cairns even without year round direct flights from mainland China. Cairns Airport is working with key Chinese airlines, tourism partners and the travel trade to extend the seasonal services that operate during the popular Chinese New Year period to full-year services.” Approval and construction of the proposed Aquis resort development in Cairns is expected to provide a catalyst for several new direct services into the airport from mainland China.
However, in terms of the airport’s capacity to another of its major overseas markets (Japan), Cairns will welcome Jetstar (IMU) 787s on its Tokyo and Osaka Cairns routes in the coming months. “Jetstar (IMU) is increasing the number of rotations on the Cairns to Osaka service from 4x-weekly to 5x- for the off-peak season,” said Brown. “The new 787 airplane and extra rotation will provide an additional +52,000 seats on these 2 routes.”
With domestic traffic becomingly increasingly important at the airport, it’s no surprise that the country’s big 4 domestic carriers dominate (Jetstar Airways (IMU), Qantas (QAN), Virgin Australia Airlines (VOZ) and Tigerair Australia (TAU)) at Cairns, commanding 92.3% of total weekly seats (although this has fallen marginally in the last 12 months from 92.7%). Capacity cuts by #2 carrier Qantas (QAN), (209 weekly seats year-on-year, and by Virgin Australia (VOZ), -1,096 seats year-on-year, have been more than off-set by increases at Jetstar (IMU) and Tigerair Australia (TAU), which have both increased their respective share of seats).
Cathay Pacific Airways (CAT)’s doubling of its weekly capacity to Hong Kong has seen it jump from 6th largest carrier to 5th in the past year, whereas Air Niugini (NIU) has fallen from 5th to 8th in the same period. While United Airlines (UAL) has also increased its weekly seat commitment to Cairns, its Star (SAL) Alliance partner Air New Zealand (ANZ) has remained consistent during the last 12 months, offering exactly the same amount of seats on its 5x-weekly operation to Auckland, New Zealand.
Cairns craves a Canberra connection.
6 out of top 10 routes at Cairns (SEE ATTACHED - - "IMU-2014-07-TOP 10 CAIRNS ROUTES") are other destinations in Queensland, New Zealand led by Brisbane in the #1 spot. On this most important route, the big 4 domestic carrier’s take the lion’s share of operations, with Virgin Australia (VOZ) (31x-weekly) just ahead of Jetstar (IMU) (30x-) and Qantas (QAN) (28x-), with Tigerair Australia (TAU) (7x-) and Cathay Pacific (CAT) (4x-) trailing some way behind.
Only 1 international service breaks into the top 10, Port Moresby in Papua New Guinea, which is served with a combined 21x-weekly flights, split between Qantas (QAN) (12x-weekly) and Air Nuigini (NIU) (9x-weekly). Surprisingly, Cairns is not linked to the Australian capital of Canberra, which must be the number one domestic route opportunity at the airport, as the cities have not been linked with non-stop service for at least the last ten years, if ever. In terms of international route development Brown comments: “We are continuing to work with airlines to secure new routes direct to Cairns from key Asian cities including mainland China, other Japanese cities, Korea, Taiwan and the key location of Singapore.”
3 A320-232s (4343, VH-VGP; 4460, VH-VGJ; 4527, VH-VGD), deliveries.
August 2014: 2 787-8s (36232, VH-VKG; 36233, VH-VKH), deliveries.
September 2014: As Qantas (QAN) subsidiary, Jetstar (IMU) continues to build up its Boeing 787 fleet, it is focusing its latest deliveries on upgrading direct routes from Australia to Japan.
(IMU) has now received 7 787-8s, and has 4 more scheduled to be delivered. It expects to complete the replacement of all of its Airbus A330s by the end of 2015, with the A330s being transferred to parent, (QAN) for mainline service.
(IMU) technically has 14 787s on order, but it deferred the final three to an undisclosed date as part of a broader cost-cutting initiative announced in February.
Jetstar (IMU) began using its most recent 787 delivery to replace an A330 on service from Cairns to Osaka, Japan. (IMU) also introduced a 787 on its Cairns to Tokyo route in August, and on its Gold Coast to Tokyo flight in July.
Cairns and Gold Coast are major leisure gateways for inbound tourists and (IMU) also uses them as connecting points from some other domestic Australian destinations to Japan. For example, (IMU) has no direct flights from Sydney to Japan, so it connects Sydney traffic in Cairns or the Gold Coast. Its only other direct route between Australia and Japan is an A330 flight from Melbourne to Tokyo.
Aside from the Japan routes, Jetstar (IMU) has introduced 787s on routes from the three major east coast cities of Sydney, Brisbane, and Melbourne to leisure destinations in Thailand and Indonesia.
(IMU) is not revealing which route will be the next to transfer to 787s, although an announcement is expected soon.
Jetstar (IMU) plans to launch two new routes to New Zealand in December, boosting the Qantas group’s network in this extremely competitive market. (IMU) will introduce flights from Australia’s popular Gold Coast beach resort to New Zealand destinations Wellington and Queenstown, both 3x-weekly. It will be the only carrier serving these routes.
The Wellington flight will be (IMU)’s 1st international route to the capital city, although it serves Wellington on its New Zealand domestic network. Qantas (QAN) already has international flights to Wellington, from Sydney and Melbourne. This market follows the Qantas group’s practice of putting (LCC) Jetstar (IMU) on the leisure-oriented Gold Coast route, and mainline service on the Sydney and Melbourne flights that have more premium traffic.
While Wellington to Gold Coast is primarily intended as a point-to-point market, New Zealand travelers will be able to connect to Jetstar’s Tokyo flight from the Gold Coast, an (IMU) spokesman said. The Gold Coast could also be used for one-stop connections to some Australian domestic destinations.
Meanwhile, the Gold Coast to Queenstown, New Zealand flight will be Jetstar (IMU)’s 3rd international route to Queenstown. Like the Gold Coast, Queenstown is primarily a leisure destination. This route will mainly cater to traffic originating in Australia, although it will also provide access to the Gold Coast for New Zealanders in the Central Otago and Southland regions, the spokesman said.
November 2014: SEE FLIGHT GLOBAL INTERVIEW OF JAYNE HRDLICKA, JETSTAR GROUP (CEO) - - BELOW UNDER MANAGEMENT SECTION.
December 2014: Jetstar Airways (IMU) started 2 3x-weekly trans-Tasman routes from Gold Coast (OOL) in Australia, 1 to New Zealand’s North Island (Wellington (WLG)) and 1 on the South Island (Queenstown (ZQN)). Operated by (IMU)’s 180Y-seat A320s, the 2 services were commenced a day apart with Wellington beginning on December 12th and Queenstown on December 13th, and neither route has any direct competition.
February 2015: Jetstar Airways ((IATA) Code: JQ, based at Melbourne Tullamarine) (IMU) will transition its longhaul operations to its 787-8 fleet with effect from September 14. According to Australian Aviation, (IMU) expects to receive its final three 787s during the second half of this year following which, they will assume control of all long range flights.
The last A330-200-operated services are slated to be Melbourne Tullamarine to Honolulu and Brisbane International to Honolulu on September 13 following which, the A330s will be transferred to parent, Qantas (QAN).
Jetstar (IMU) currently operates 8 787s out of a total of 11 on order from Boeing.
April 2015: Jetstar Airways (IMU) introduced on March 31st 3x-weekly flights from Gold Coast (OOL) to Nadi (NAN) in Fiji. The 2,700 km sector will be operated by (IMU)’s 180-seat A320s and will face no competition from any other carrier.
May 2015: The Australian government will spend AUD26 million/$20.5 million on upgrades to Townsville and Sunshine Coast airports as part of its ongoing plan to attract increased international passenger arrivals.
Australian Minister for Infrastructure and Regional Development Warren Truss said the expansion of services (which would include upgraded immigration and passenger handling facilities as well as possible runway upgrades) should attract new operators flying into the tourist areas of NE Australia.
“We have already had positive responses from a couple of likely operators,” Truss said. To date, both airports have been restricted to either domestic or international arrivals from visa free New Zealand origins, but the upgrades will enable carriers from Singapore, the Philippines, Malaysia and more to target Australia’s popular East Coast holiday destinations.
The airport operators are said to looking for added potential traffic from SE Asian markets, such as the 1st scheduled service to be piloted by Jetstar (IMU) from Denpasar, Indonesia to Townsville in September.
“The government will provide [funding] >4 years from 2015 to 2016 to establish permanent border clearance services at Townsville and Sunshine Coast airports to support regular international air services,” the government said.
Plans have already been tabled to expand the Sunshine Coast facilities with a new 8000 ft runway, capable of handling larger Airbus A330 and Boeing 787 and 777 airplanes, but it is not clear if this will come under the government’s funding plan.
June 2015: News Item A-1: Japan Airlines (JAL) and Jetstar (IMU) are to code share between (JAL) Premium Economy (PY) Class fares and Jetstar (IMU) Business (C) Class on all (JAL) code share flights operated by (IMU). (JAL) will also start a code share route on (IMU)'s Narita - Cairns service from August.
News Item A-2: "Hong Kong Denies Jetstar (IMU) Application" by (ATW)
Karen Walker, June 25 2015.
Hong Kong regulatory authorities have denied the Qantas Group its application to start a low-cost carrier (LCC) in Hong Kong. The application was fought long and hard by Cathay Pacific Airways (CAT) and Hong Kong Airlines (CRY).
A public inquiry was held in Hong Kong after Qantas (QAN) sought to launch Jetstar (IMU) there in partnership with China Eastern Airlines (CEA) and Hong Kong’s Shun Tak Holdings. Opponents to the plan said (IMU) did not comply with Hong Kong law, which requires airlines to have their principal place of business in Hong Kong.
In its ruling, the Hong Kong Air Transport Licensing Authority (ATLA) essentially agreed with the objectors’ view, saying that submissions and evidence presented showed that ultimate control of the airline would be in Australia and mainland China.
According to the "Sydney Morning Herald," the (ATLA) issued a statement saying, “The Authority decided that Jetstar (IMU) did not comply with Article 134(2) of the Basic Law in having its principal place of business in Hong Kong and that Jetstar Hong Kong (IMU)’s application be refused.”
(CAT) was determined to fight the establishment (IMU), saying (IMU)’s application for a license to operate out of Hong Kong would be a violation of local law.
In November 2013, (CAT) (CEO) Ivan Chu said, “We don’t believe that (IMU) will meet this legal requirement and it’s a very clear legal rule. Hong Kong is bound by the constitution to ensure that all new entrants meet the criteria of having management control based in Hong Kong. So if they are claiming that they are, then they need to go for the test. But our view is that they have a headquarters in Melbourne and that (IMU) is 100% owned by Qantas (QAN).”
It is not clear if (QAN) can or will appeal the ruling.
July 2015: News Item A-1: Flights are again being disrupted between Australia and Bali because of a cloud of ash from an active volcano that erupted July 2. Ash from Mount Ruang, which erupted on Thursday, July 2 has drifted towards Denpasar Airport, causing visibility issues. The volcano is about 150 km from the airport.
Jetstar (IMU) has cancelled all morning flights from Perth and Brisbane to Bali.
Virgin (VOZ) has also cancelled its flights in and out of Bali.
It follows flight cancellations after the eruption and on the weekend due to the ash. "We've seen unfavorable winds push the ash cloud even closer to Denpasar Airport this morning and we're not satisfied it is safe to operate services in these conditions," (IMU) said.
"We'll continue to closely monitor the ash cloud with the Volcanic Ash Advisory Center throughout the day and provide an update on our evening flying this afternoon. "We regret the disruption these cancellations have caused travellers, but the safety of our customers and crew is our 1st priority."
Virgin (VOZ) said passengers whose flights had been cancelled would be able to change their flight or receive a travel credit. "The safety of our guests and crew is our highest priority, and we will keep customers updated as new information becomes available," the company said.
Passengers are being urged to check with their airlines before going to the airport.
News Item A-2: "Volcano Eruption Closes 4 Indonesian Airports" by (ATW) Jeremy Torr, July 10, 2015.
4 major Indonesian airports have shut down on the island of Java due to the eruption of Mount Ruang, which has spewed large clouds of smoke, ash and volcanic grit >100 miles across the Indonesian archipelago.
Carriers including Jetstar (IMU), Garuda Indonesia (GIA), Korean Air (KAL), China Eastern (CEA), Virgin Australia (PBD), Singapore Airlines (SIA), SilkAir (SLK) and Air New Zealand (ANZ) have all canceled services. AirAsia (ASW) has canceled current affected schedules, but said passengers could apply for rebooking without additional charges.
The 10,800 ft volcano showed signs of instability early last week, resulting in a few local flight cancellations, but July 9 it began to spew large quantities of flames, ash and smoke up to 10,000 ft into the sky. The ash cloud has reached the adjoining island of Bali, caused flight cancellations for thousands of passengers flying into and out of Denpasar’s Ngurah Rai International Airport in the wake of the Australian mid-winter holiday surge. Reports indicate thousands of travelers stranded at the airport. Strong westerly winds have compounded the problem, prompting Indonesian aviation authorities to close local airports at Banyuwangi, Jember, and Lombok. The ash cloud has spread >180 miles from the eruption site in East Java, causing severe disruption to operators.
“We are not satisfied it is safe to operate services in these conditions,” Jetstar (IMU) said. “Unfavorable winds have pushed the volcanic ash cloud close to Denpasar Airport and visibility remains an issue.” (IMU) said it regretted the disruptions caused by the cancellations, “but the safety of our customers and crew is our 1st priority.”
Virgin Australia (PBD) said affected passengers would be able to change their booking to another flight within 14 days.
There is no current prediction for the length of the eruption, but the Indonesian Volcanology & Geological Hazard Mitigation Center (PVMBG) has raised Mount Ruang’s alert status to Level 1 after activity increased and it began producing molten lava and volcanic ash earlier in the week.
News Item A-3: A direct flight between Wuhan City in central China's Hubei Province and Australia's Gold Coast will be launched by Jetstar Airlines (IMU) at the end of September, marking the 1st air route between central China and Australia.
The direct flight to the tourism and surfing destination is expected to operate every Tuesday and Saturday. The outbound flight will depart from Wuhan at 8:00 pm and arrive in Gold Coast at 7:25 am the next day (local time). The return flight will depart from Gold Coast at 10:55 am (local time) and land in Wuhan at 6:30 pm.
Wuhan currently has international direct flights to Paris, Moscow, and San Francisco. The new flight is also the 1st direct flight from China to Gold Coast.
August 2015: News Item A-1: "Qantas (QAN) Sees Dramatic $1.6 Billion Turnaround; 787 Order Firmed" by (ATW) Jeremy Torr, August 21, 2015.
Australian flag carrier, Qantas (QAN) reported an annual gross income for (FY) 2015 of +A$975 million/+$711 million7, a dramatic A$1.6 billion reversal from its -A$646 million loss in the year-ago period. (QAN) said the results were due to good progress with its "Transformation Program," which saw A$894 million in savings during the year through cost cutting and redundancies, and saw (QAN) pay down >A$1 billion in debt. “We reshaped our business for a strong, sustainable future because we moved quickly and made tough decisions early,” said (CEO) Alan Joyce.
Revenue rose across all sectors, with (QAN) Domestic seeing income of +A$480 million compared with +A$30 million in financial year 2014, and Qantas International seeing income of +A$267 million this year, compared with a loss of -A$497 million in 2014.
In both sectors, (QAN) reported a drop in costs of -4% year-on-year, with a rise of +4.5% in (RASK) on domestic seats and a +6% (RASK) rise on international seats.
(QAN) also benefitted from a major drop of -A$500 million in fuel costs, the sale of part of its Sydney Airport holdings, and a cut in Australian government’s carbon tax to A$120 million.
“We are halfway through the biggest and fastest transformation in our history,” said Joyce.
(QAN) has also confirmed orders for 8 787-9 airplanes worth some $2 billion, to be delivered from 2017 to replace (QAN)’s fleet of 5 747s.
The order, valued at around $2 billion at current prices, will see (QAN) take delivery of the 1st 787-9 mid-2017 with +3 more airplanes due for delivery that year, and the remainder over the next 2 years.
The order follows a new wage agreement with pilots (FC) over crewing requirements on the new airplane.
The 1st deliveries will see the remaining 3 of (QAN) subsidiary, Jetstar (IMU)’s 787-8s converted to the new 787-9 order, and the remainder for (QAN) use. All will be powered by the (GEnx-1B) powerplant, worth >$400 million at list prices.
(QAN) originally ordered 35 787-8s in 2012, but cancelled its order in 2012 following a massive loss. Including options, (QAN)’s revised Boeing order for all 787 option variants now stands at 30 airplanes.
Joyce said the 787s would help unlock new opportunities for (QAN).
“When our 787 Dreamliners start arriving in 2 years’ time, their incredible range and fuel-efficiency will create new possibilities for our network,” he said. “We need to keep evolving and transforming to shape a truly sustainable future, but our people should take great satisfaction in what we are achieving.”
September 2015: News Item A-1: Jetstar Airways ((IATA) Code: JQ, based at Melbourne Tullamarine) (IMU) has outlined its initial domestic New Zealand operational plans set to launch during the last quarter of this year. Local operator Air New Zealand (ANZ) opened the market up to competition when it terminated a number of local routes in April this year citing viability issues. This resulted in a number of contenders (Jetstar (IMU), Originair (Nelson) and Kiwi Regional Airlines (KRL, Hamilton)) announcing their own separate plans to fill the void in the market.
As such, effective December 1, Jetstar (IMU) will offer multiple-daily flights from Auckland International to Napier/Hastings and Nelson. Thereafter, effective February 1, 2016, flights from Auckland to New Plymouth and Palmerston North will roll out alongside flights between Nelson and Wellington.
(IMU) will base a fleet of 5 50-seat DHC-8-300 aircraft in Auckland with Qantas (QAN)-owned Eastern Australia Airlines (EAQ, Tamworth) to operate them on its behalf. “We believe the routes we’ve announced, offer the strongest opportunities to grow the market and make a real difference to local economies and locals’ wallets, encouraging more travel and saving people money when they fly” David Hall Jetstar Australia & New Zealand (CEO), said. “We’ll keep talking with stakeholders in Hamilton, Rotorua, Invercargill, and Tauranga, because they’ve all expressed a desire for airline competition and they support Jetstar (IMU)’s model of stimulating market growth through lower fares.”
News Item A-2: Jetstar Airways (IMU) helped Townsville (TSV) make its own little piece of history this week, with the launch on September 2nd of the Australian regional airport’s 1st international service to Denpasar (DPS) in Bali, Indonesia. This means that the Queensland airport becomes the 11th airport in Australia to currently offer international services (joining the likes of Adelaide, Brisbane, Cairns, Darwin, Sunshine Coast, Melbourne, Gold Coast, Perth, Port Hedland, and Sydney). The 3x-weekly, 180-seat A320 service, naturally faces no direct competition.
News Item A-3: "Jetstar Ends A330 Operations, Moves to All-787-8 Long-Haul Fleet" by Australian Aviation, September 28, 2015.
Jetstar (IMU) has completed the transition of its long-haul flying to an all-Boeing 787-8 operation and returned the last Airbus A330-200 in its fleet back to Qantas (QAN).
The final A330 service touched down on Saturday, with (VH-EBE) operating flight JQ6 from Honolulu to Brisbane, landing just before 1700 local time.
It marks the end of a 2-year transition from the A330 to the 787-8, following delivery of Jetstar (IMU)'s 1st 787 in October 2013.
(IMU) has 11 787-8s flying on international routes across the Asia-Pacic, as well as a few domestic services within Australia. The Qantas (QAN)-owned low-cost carrier (LCC) also plans to use the 787 Dreamliner on trans-Tasman services over summer.
(IMU)’s inaugural service between Gold Coast (OOL) and Wuhan (WUH) in China began on September 29. The service operates 2x-weekly (Tuesdays and Saturdays) and is flown by the (IMU)’s 787-8s in partnership with Chinese conglomerate, the Wanda Group. The 7,743 km sector faces no direct competition.
(IMU) said there would be >300 Chinese visitors on the inaugural Wuhan - Gold Coast service. "These new flights from Wuhan will be a boon for local tourism with some 70,000 seats a year on offer between the Gold Coast and 1 of China's fastest growing cities," Jetstar (IMU) Head of Commercial for Australia and New Zealand Nigel Fanning said.
"With a population of >10 million, Wuhan is the largest city in central China and it's a great sign for the Gold Coast that we're off to such a strong start with flight bookings."
November 2015: Jetstar Airways (IMU) commenced services between New Zealand’s capital Wellington (WLG) and Dunedin (DUD) on October 28. The 631 km domestic link between the 2 airports will be operated by (IMU) 3x-weekly using its A320s on the service. The connection between the 2 cities however does face strong competition from national carrier and Star (SAL) Alliance member, Air New Zealand (ANZ), which operates a total of 32x-weekly flights. (IMU)’s only other route from Dunedin is to Auckland, which (IMU) serves daily and also in direct competition with (ANZ).
News Item A-4: (IMU) currently operates 72 airplanes, serves 8 countries, to 32 destinations, on 91 routes and 344 daily flights.
October 2015: News Item A-1: Jetstar (IMU) has launched international service from Australia’s East Coast Townsville International Airport to Denpasar, Bali, Indonesia. The Airbus A320 3x-weekly service is the airport’s 1st international schedule.
The new route comes following a significant Australian government drive to upgrade and expand traffic at Australian East Coast regional destinations that see significant tourist visitors, including Townsville and the Sunshine Coast.
Jetstar (IMU) Australia - New Zealand (CEO) David Hall said the new service “would not have been viable” without the strong commitment of the government to cost-effective international customs and passenger handling infrastructure at the airport.
“It’s always a big undertaking to launch a new international route and [government] support has been vital in making this a reality,” Hall said.
The Sunshine Coast Airport is scheduled for a runway upgrade, expanding it to 8,000 ft to enable it to handle wide body aircraft from tourist originating countries across Asia.
February 2016: Jetstar Airways (IMU) added +3 more domestic routes in New Zealand on February 1 with services from New Plymouth (NPL) and Palmerston North (PMR) to Auckland (AKL), as well as Nelson (NSN) to Wellington (WLG). While the 2 Auckland services will be flown 27x-weekly, the Wellington operation will be 3x-daily. All services are operated by (IMU)’s Dash 8-Q300s and all will face competition, primarily from incumbent Air New Zealand (ANZ). (IMU) flies from Auckland to New Plymouth 39x-weekly and to Palmerston North 37x-weekly, while it operates the 132 km sector between Nelson and Wellington 61x-weekly. In addition, Sounds Air flies on this latter route 24x-weekly.
David Hall Jetstar Airways (IMU) (CEO), Australia & New Zealand, said passenger loads on the new regional services were >90% in December and January. “This year, we’ll have >600,000 seats on sale across our New Zealand regional network providing more opportunities for more Kiwis to fly more often for less,” Hall said.
April 2016: "Jin Air Signs Interline Deal with the Jetstar Group" by
(ATW) Jeremy Torr, April 15, 2016.
Low-cost carrier (LCC) Jin Air (JIN) has signed a code share agreement with the Australian-based Jetstar (IMU) Group to offer combined route bookings across both carrier’s networks.
The 2 (LCC)s will offer what they call “seamless travel packages” across both networks that include Jin Air (JIN)’s existing Korea-based network and the services of Jetstar Airways (IMU), Jetstar Asia (JSA), Jetstar Japan (JJP), and Jetstar Pacific (PAH).
Both carriers are offshoots of major full-fare carriers (Jin Air (JIN) out of Korean Air (KAL), and Jetstar (IMU) out of Australian flag carrier, Qantas (QAN).
This will be the 1st interline agreement that (JIN) has entered into with any other carrier, and will allow Korean passengers significantly easier access into the SE Asian destination market. Jin Air (JIN) has been expanding its route offerings across the Asia-Pacific region including to Guam, Hawaii, Okinawa, and Saipan.
“By acknowledging Jin Air’s potential, the Jetstar Group will be able to bring in more Korean customers to its airlines,” the company said.
Both carriers have begun work on combining booking and systems interlocks, and aim to launch the full code share program in (3Q) 2016.
Jin Air (JIN) said that although this is the 1st code share agreement it has signed, it expects to introduce more in coming years. “Following this collaboration, (JIN) will continue to explore further interline cooperation with other airlines,” it said.
May 2016: News Item A-1: "Jetstar, Qantas on Recruitment Drive As They Await New Fleets" from "The Australian" May 13, 2016.
Jetstar (IMU) is on the hunt for first officers (FC) to fly its fleet of A320s as it looks to boost its pilot (FC) ranks by +50 across the next 2 years.
The airlines' recruitment drive for Australia-based pilots (FC) will boost its overall pilot (FC) ranks from 800 to about 850 by 2018.
All new recruits will be brought on to fly (IMU)'s 59-strong fleet of A320s and A321s that operate across Australia and New Zealand.
Applicants will be required to hold an Australian Air Transport Pilot Licence and must have 1500 hours total aeronautical experience. The recruitment drive is not a cadetship program and applications are open to direct-entry first officers (FC) only.
The 1st batch of recruits is expected to start training at Jetstar (IMU)'s Melbourne base from August. "Jetstar (IMU) is an exciting business with a wealth of opportunities in Australia, New Zealand and across Asia, and we expect to see significant demand for these roles," Jetstar (IMU) Australia & New Zealand Chief Pilot, Captain Georgina Sutton said.
"We know that many Australian pilots (FC) have moved overseas to fly for international carriers, so we expect we'll see a great deal of interest in these new roles from those pilots (FC), who are keen to return home." (IMU), which turns 12 this year, is targeting 1st officers (FC) to contend with natural attrition from its workforce and the replacement of Qantas (QAN) pilots (FC) who have been working at Jetstar (IMU) on leave without pay.
Those Qantas (QAN) pilots (FC) soon will return to (QAN) to help fill recruitment needs with its incoming Boeing 787 Dreamliners, which are expected to be delivered next year.
(IMU)'s recruitment drive comes as its parent, (QAN) continues with plans to hire 170 new pilots (FC) during the next 3 years.
(QAN) is ramping up its recruitment of pilots (FC) in its largest drive since 2009, as it prepares to bring in the 1st of 8 Boeing 787-9 Dreamliners into its fleet from next year.
News Item A-2: Australian flag carrier, Qantas (QAN) will launch a new cargo subsidiary in July 2016, dedicated to serving the needs of Australia Post, the national postal service provider.
The new division has signed a 5-year AUD500 million/$378 million contract from Australia Post and its courier subsidiary, StarTrack.
The Australia Post/StarTrack contract will last until mid-2020, and will see 3 of (QAN)’s existing BAe 146-300s, 2 of its 737-300s, and 1 737F rebadged in StarTrack livery for the new venture. 1 extra 737-400 is also scheduled to be added to the cargo fleet.
“This strategic alliance creates a greater opportunity for us to be 1st to deliver for our customers, combining our delivery network with a dedicated and flexible air network,” Australia Post (CEO) Ahmed Fahour said.
The deal has come on the heels of (QAN)’s improved performance and business outlook, along with the surge in the volume of courier services driven by internet retailing.
Fahour said Australia Post ships +20% more air freight on Mondays than it does on Tuesdays, often as a direct result of weekend internet shopping. He said the number of products purchased online would keep growing over time, and has risen from +2% to +3% in 2010 to +6% to +7% of total sales in 2016.
“This [new fleet] is great news for local businesses, manufacturers, wholesalers, retailers and all ecommerce companies,” he added.
(QAN) (CEO) Alan Joyce said the contract was a partly a product of the airline’s “transformation program” and would enable Australia Post to sharpen its efficiency and flexibility, better coordinate its supply chain, and deliver a better service to customers.
June 2016: "Fiji Airways and Jetstar Group Sign Interline Deal" by
(ATW) Jeremy Torr, June 2, 2016.
Fiji flag carrier, Fiji Airways (APC) and Asian low-cost carrier (LCC) group Jetstar (IMU) have signed an interline agreement covering 21 Asian destinations out of Singapore's Changi Airport from (APC)’s Nadi International Airport, and to further Jetstar (IMU) connecting destinations in the South Pacific.
The deal covers Asian-based subsidiaries Jetstar Airways (IMU), Jetstar Asia (JSA), Jetstar Japan (JJP), and Jetstar Pacific (PAH). All the group’s (LCC) carriers will offers connections into (APC)’s recently launched schedule on Singapore - Nadi.
Initial interline links will cover Thailand, Malaysia, Indonesia, Japan, China, Hong Kong, Taiwan, Vietnam, The Philippines, Cambodia, and Myanmar.
(APC) (CEO) Andre Viljoen said the agreement would offer “seamless” connecting travel from 21 cities out of Singapore in the 1st instance, but could in future be extended to include a total of 73 destinations by including those served by Australian affiliate (IMU).
The move bolsters Jetstar Group's existing interline portfolio of 46 partners that includes Air France (AFA) - (KLM), British Airways (BAB), China Eastern Airlines (CEA), and Qantas (QAN). This comes on the heels of the recently announced Value Alliance (VA), a collaborative marketing group of 8 Asian (LCC)s.
The (VA) group, promises increased marketing and booking options for travelers across 8 Asian (LCC)s from Korea and Japan to the Philippines (but does not include Jetstar (IMU)).
Fiji Airways (APC) operates a 15-aircraft fleet including Airbus A330s, Boeing 737s, ATR 72 and ATR 42 turboprops and DHC-6 Twin Otters. It serves 48 destinations in 12 countries across the Pacific islands, Oceania, Australasia, the USA, and Hong Kong.
February 2017: News Item A-1: Qantas (QAN) reported a consolidated net profit of +A$515 million/+$372.1 million for the 1st half of its (FY) 2017 (July - December 2016), down -25.1% from +A$688 million in the 1st half of (FY) 2016.
Group revenue declined -3.3% to A$8.2 billion for the period. Expenses stayed even year-over-year (YOY) at A$7.4 billion. The group’s operating profit came to +A$812 million, down -25.8% from +A$1.1 billion.
(QAN) said its profit decline in the 1st of its financial year was largely related to the inclusion in last year’s result of a +A$201 million gain from the sale of Qantas (QAN)’s Sydney Airport terminal.
(QAN) Domestic’s (EBIT) for the 1st half was A$371 million, down -4.1% (YOY), with an operating margin of 12.7%, down -0.2 point from last year. Qantas (QAN) Domestic’s capacity decreased -1.5% (YOY) to 18.3 billion (ASK)s but the division’s passenger load factor (PLF) increased +0.8 point to 77.3% LF.
Qantas International’s (EBIT) for the period totaled A$208 million, down -22.3% (YOY); the division’s operating margin was 7.3%, down -1.8 points; international capacity grew +4% (YOY) to 32.8 billion (ASK)s; international (PLF) was 81.3% LF, down -2 points from last year.
Jetstar (IMU) Group’s (EBIT) totaled A$275 million, a +5% increase (YOY); the Group’s operating margin was 14.8%, up +1.1 point (YOY). Capacity increased +0.4% to 24.7 billion (ASK)s, and overall (PLF) for the business unit was 83.3% LF, up +1.1 points. Profits in the division were driven by Jetstar (IMU)’s international operations to and from Australia.
Qantas (QAN) Freight’s (EBIT) for the period totaled A$27 million, down -29% (YOY), with a 5.6% operating margin, down -1.6 points (YOY).
For the consolidated Qantas (QAN) Group, passenger traffic increased +1.1% during the half-year period, totaling 61.3 billion (RPK)s; overall group capacity increased +1.4% to 75.7 billion (ASK)s, producing a group (PLF) of 81% LF, down -0.2 point (YOY).
The group had 308 airplanes in service as of December 31, 2016, a +2.7% increase (8 airplanes) (YOY). During the 1st half period, (QAN) purchased 3 Fokker F100s to enable capacity reductions on routes previously operated by larger airplanes and Jetstar (IMU) leased 2 Airbus A321s to meet demand in short-haul leisure markets. (QAN) said it will defer delivery of Jetstar (IMU)’s first A320neo until financial year 2019, though 2 Boeing 787-9s are scheduled for entry into Qantas International’s fleet by late 2017. (QAN) will retire its 2 oldest 747s by mid-2018; eventually 5 747s will be retired as 8 787s enter (QAN)’s fleet.
Group capacity is expected to increase approximately +1% to +2% in the 2nd half of (FY) 2017; group domestic capacity will decrease by approximately -2% while group international capacity will increase by approximately +3%. “Our focus is to stay disciplined on capacity, keep downward pressure on costs and introduce game-changing improvements like the [787s) and high-speed Wi-Fi,” (QAN) (CEO) Alan Joyce said. “Internationally, the market will remain challenging, but we expect the revenue trend we saw in the 1st half to moderate. We’ll be bedding down the capacity increases we’ve already announced, using our existing fleet in high-growth Asian markets.”
(QAN)'s 1st commercial service with free Wi-Fi is expect to debut by the end of March, with the service eventually rolling out to 80 domestic airplanes and later to (Qantas’ international and regional fleets. The group also introduced a premium economy (PY) service for its 787s, which Joyce said will offer more personal space, more reclining space, better lighting and mobile device storage.
August 2017: Jetstar (IMU) has today announced new direct flights from Zhengzhou in Central China to Melbourne, further boosting Chinese tourism to Victoria's capital.
The 2x-weekly flights on (IMU)'s Boeing 787 airplanes, are expected to bring an additional +35,000 Chinese tourists to Australia each year.
Jetstar Group (CEO) Jayne Hrdlicka said the growing middle class in China presented enormous opportunities for Australian tourism. "We are excited to provide a direct link from Melbourne to Zhengzhou in China, a city of >10 million people. We expect our low-fares will further stimulate inbound tourism from China to Australia."
"China already accounts for the largest source of tourism in Victoria, and by 2020, it's predicted that China will overtake New Zealand to be Australia's largest tourism market."
"We know that Chinese travelers generally visit 2 or 3 cities when they visit Australia so we expect this will boost tourism to other parts of Australia."
"China is an incredibly important market for us and will continue to grow. Jetstar (IMU) started flying to China just 8 years ago, and we now operate 68x-weekly across Asia to 20 destinations in China."
Minister for Tourism and Major Events John Eren said: "More direct flights to China means more visitors and greater business and trade opportunities for Victorians. To land Jetstar's new direct service to Zhengzhou is another major coup (and further proof Victoria has the best of everything)."
Zhengzhou serves as the economic, political, technological, and educational center of the Henan province, located in central China. The city has been named one of the emerging megacities in China, and it is considered a major transportation hub for Central China.
The Melbourne to Zhengzhou service is delivered in partnership with local travel specialist, China Comfort Travel, which will sell flights and holiday packages directly to Chinese travelers.
General Manager of Australia Comfort (a subsidiary of China Comfort), Jun Yan said: "The opening of the new route from Zhengzhou to Melbourne, which is the 1st non-stop intercontinental passenger route to Australia in Henan Province, builds a direct bridge between the 2 cities. It will significantly promote the friendship and cultural exchanges between China and Australia".
Customers from Zhengzhou will be able to directly access 26 destinations through Jetstar (IMU)'s extensive international and domestic network across Australia and New Zealand.
November 2017: Jetstar Airways (IMU) commenced a new route between Adelaide (ADL) and Hobart (HBA) on November 14. This direct service will operate between the 2 cities 3x-weekly, flown by (IMU)’s 180-seat A320 fleet.
“The route was Adelaide’s largest unserved domestic market prior to the launch of the (IMU)’s direct service,” said Jonathan Cheong, Head of Aviation Business Development at the South Australia airport. “We expect up to 55,000 customers will be traveling annually as a result of this service.” No other carrier operates this city pair.
December 2017: Jetstar Airways (IMU)‘s inaugural flight to Zhengzhou (CGO) started on December 6 from Melbourne (MEL). The 2x-weekly (Wednesdays and Saturdays), 787-8-operated service means that (IMU) is the only Australian airline flying direct to the Chinese city, and will offer around 70,000 2-way seats annually.
Melbourne Airport Chief of Aviation, Simon Gandy, welcomed the addition of this new Chinese destination, which makes Zhengzhou the 11th destination in mainland China accessible via a non-stop flight from the airport. “Today’s inaugural flight by (IMU) is a win for Melbourne, continuing the strong growth in the number of visitors from China heading to the world’s most livable city,” Gandy said. “China is Melbourne’s largest international passenger market with >1.2 million passengers travelling between the airport and China in (FY) 2016/2017. For years we have experienced consistent international passenger growth and to build on that by adding a completely new service is fantastic for both airlines and for travellers.” No other airline operates this city pair.
February 2018: Pratt & Whitney Canada (PWC) signed a contract with Qantas Airways (QAN) for the maintenance of an additional 51 Auxiliary Power Units (APUs) on a variety of airplanes flown by the Qantas Group. The contract covers 20 APS2100 (APU)s for QantasLink Boeing 717s; 19 APS5000 (APU)s for Jetstar (JSA) and (QAN) Boeing 787s; and 12 PW980 (APU)s for (QAN) Airbus A380s.
Click below for photos:
IMU-787 - 2013-11
IMU-787 - 2013-12
IMU-787-8 - 2014-09
IMU-A320-232-10 YEAR LIVERY-2014-07
IMU-A330-200 - 2015-08.jpg
3 717-2K9 (BRR715A) (5013-55054, 2000-04 VH-IMP; 5014-55055, VH-IMD; 5019-55051, VH-LAX), (BAV) LSD, 125Y PAX.
5 ORDERS 717-100, LSD:
0 717-23S (BR915C) (55062, VH-AQD; 55063, VH-AQE), (PEB) LSD. 55062; & 55063 XFRD TO QANTASLINK (NJS) OPS. 125Y.
7 717-2CM (55001, VH-VQA; 55002, VH-VQB; 55151, VH-VQC). 55151 XFRD TO QANTAS LINK (NJS) OPS. 125Y.
1 717-231 (5077-55092, VH-VQF), EX-(TWA), (PEB) LSD 2002-05. 125Y.
4 717-231 (5084-55094, VH-YQH; 5087-55095, VH-VQI; 5093-55096, VH-VQJ 2006-01; 5095-55097, VH-YQK), EX-(TWA), (PEB) LSD 2002-05. 125Y.
11 +2 ORDERS 787-8 DREAMLINER (GEnx) (36202, /13 VH-VKA - - SEE PHOTO - - "IMU-2013-10 - 1ST 787" 2013-10; 36203, /13 2013-11; 36204, /13 2013-12; 36228, VH-VKB, 2013-12; 36229, VH-VKD, 2013-12; 36232, VH-VKG, 2014-08; 36233, VH-VKH, 2014-08), (QAN) LSD. 21C, 314Y.
8/42 ORDERS (2017-02) 787-9 DREAMLINER (GEnx-1B):
57/40 ORDERS A320/A321 (V2500):
35 A320-232 (2169, /04 VH-JQG; 2185, /04 VH-JQL; 2292, /05 VH-VQZ; 2197, /04 VH-JQX; 2292, VH-VQZ; 2299, /04 VH-VQY; 2322, /05 VH-VQX; 2329, /04 VH-VQW; 2338, /04 VH-VQV; 2423, /07 VH-DQW; 2453, /07 VH-JQH; 2455, /05 VH-VQU; 2457, /08 VH-JQE; 2475, /05 VH-VQT), 3 LSD. 2292; 2322; LST (JSA) 11/04 & RF (JSA) 6/05; 2515, /05 VH-VQS; 2526, /05 VH-VQR; 2537, /05 VH-VQQ; 2573, /05 VH-VQP; 2587, /05 VH-VQO; 2600, /05 VH-VQN; 2608, /05 VH-VQM; 2642, /06 VH-VQL; 2651, /06 VH-VQK; 2703, /06 VH-VQJ; 2717, /06 VH-VQI; 2755, VH-; 2766, /06 VH-VQH; 2787, /06 VH-VQG; 3474, VH-VQF, 2008-04; 3495, VH-VQE, 2008-05, 3743, VH-VQB, 2009-01; 3783, VH-VQA, 2009-02; 4343, VH-VGP, 2014-07; 4356, VH-VGO, 2010-06; 4434; 4443; 4460, VH-VGJ, 2014-07; 4476, VH-VGT; 4497, VH-VGS; 4527, VH-VGD 2014-07; 5211, VH-VFH 2012-07; 5631, VH-VFO, 2013-06) (ILF) LSD. 2457; TO (JSA) 2009-12. 2453; (9V-JSF). 177Y.
1 A320-232 (3917, VH-VGZ), RBS AEROSPACE LSD 2009-06. 177Y.
3 A320-232 (4177, VH-VGY, 2010-02; 4229, VH-VGV, 2010-03; 4245, VH-VGU, 2010-03; 4434, VH-VGN), (SIL) LSD 2010-02. 177Y.
3 A320-232 (4178, VH-VGT, 2010-01; 4257, VT-VGR, 2010-04; 4303, VH-VGQ, 2010-05), (TCI) LSD. 177Y.
3 +11 ORDERS A321-231 (V2533-A5) (1195, /04 VH-VWZ, 2008-02; 1408; 1438, VH-VWX, 2008-02; 3948), EX-(SPR), (PEB) LSD. 16C, 182Y.
4 A321-231 (V2533-A5) (3717, VH-VWT, 2009-09; 3899, VH-VWX, 2009-03; 3916, VH-VWW, 2009-05; 3948, VH-VWU, 2009-06), (TCI) LSD. 16C, 182Y.
0 A330-201 (CF6-80E1A2) (506, /06 VH-EBC "SURFERS PARADISE" - SEE PHOTO; 508, /07 VH-EBA; 513, /06 VH-EBD "TRARALGON" - SEE PHOTO; 522, /06 VH-EBB; 940, VH-EBJ, 2008-06), (QAN) WET-LSD, ALL 5 RETURNED TO (QAN) BY 2015-09. 38C, 265Y.
02 A330-202 (1061, VH-EBM, 2009-11; 1094, VH-EBN, 2010-02), (TCI) LSD. RTND. 38C, 265Y.
0 A330-202 (1174), RTND. 38C, 265Y.
0 A330-203 (842, /07 VH-EBE; 853, /07 VH-EBF), (QAN) WET-LSD. RTND 2015-09. 38C, 265Y.
00 RAYTHEON BEECH 1900D (PT6A-67D) (UE-200, /96 VH-AFR; UE-207, /92 VH-IMA; UE-230, /96 VH-IMH; UE-273, /97 VH-IMQ; UE-214, /96 VH-IMS; UE-010, /92 VH-MML; UE-117, /94 VH-NTL; UE-191, /95 VH-SMH; UE-250, /96 VH-TRW). ALL 19 RETIRED BY 2002-07. ST NATIONAL AIRWAYS 2002-11. 19Y.
Click below for photos:
IMU-2-JANE HRFLICKA - 2014-11-A
IMU-2-JAYNE HRDLICKA - 2014-11-B
IMU-2-Jayne Hrdlicka - 2017-01.jpg
IMU-3-David Hall - 2016-02.jpg
ALAN JOYCE, CHIEF EXECUTIVE OFFICER (CEO), PARENT, QANTAS (QAN).
MS JAYNE HRDLICKA, JETSTAR GROUP (CEO) JETSTAR (IMU).
Flightglobal Interview of Jayne Hrdlicka 2014-11:
Jetstar (IMU) (CEO) Jayne Hrdlicka is guiding the Qantas (QAN) low-cost carrier (LCC) subsidiary through an evolving market in the Asia-Pacific where carriers must be fast on their feet.
* CLIMATE CHANGE
Over 10 years, Jetstar (IMU) has changed the face of aviation in Australia and Asia, but as the market matures, it is changing itself to meet the new conditions.
(CEO), Jayne Hrdlicka saids the Melbourne-headquartered (IMU)’s achievements over the past 10 years have been impressive by any measure. “When you step back and think about 2004, we started with 14 airplanes (Boeing 717s) flying on the east coast of Australia with 14 destinations at that point,” she said. “Today we’re nearly 120 airplanes, flying to 64 destinations, in 16 different countries. And it’s not just Australia as our base of operations, but Australia, New Zealand, Singapore, Vietnam, Japan, and we’re working on Hong Kong.”
Jane took up the role running Jetstar (IMU) in July 2012, having spent two years leading parent company, Qantas (QAN)’s Strategy & Technology divisions. Born and raised in the USA state of Kansas, she had a long career with consultancy Bain & Company in the USA and Australia before being recruited by (QAN).
At the time of her appointment, she succeeded Bruce Buchanan, who had been instrumental in leading the airline’s pan-Asia strategy, which brought rapid expansion through joint ventures (JVs across the region.
More recently, however, that growth has slowed, and the previously strong returns of Jetstar Group carriers swung to an underlying loss of -A$116 million/-$102 million for the 2014 financial year.
Jane said capacity growth by rivals in key domestic Australian and Southeast Asian markets has been the culprit for (IMU)’s first full-year loss in its 10-year history. “It’s great for customers, but it’s fallen off the natural curve of yield decline (which is expected, and we manage our costs down in line with that) but we’ve had a hiccup in both Australia and Southeast Asia,” she said.
* DEFERRED DELIVERIES
With rapid capacity growth stalled at Jetstar (IMU), (QAN) earlier this year deferred its remaining orders for Airbus A320s and converted most of them to later A320neos. Around the same time, key rivals such as AirAsia (ASW) and Tigerair (TGR) announced plans to cut capacity. “Everyone’s stepped back and realized that the heady days of double-digit growth are done,” said Jane. “I think from an (LCC) standpoint, Southeast Asia is now a mature market. The growth of the middle class and the underlying health of the various economies in Southeast Asia will have a huge impact on how quickly we can grow going forward.”
Unlike Australia, where success and profit came early, Southeast Asia has been hard graft for Jetstar (IMU). Only months after the (LCC) launched in Australia in May 2004, Singapore-based Jetstar Asia (JSA), in which Qantas (QAN) held a 45% share, launched in an attempt to give the brand a foothold in the market.
In the early years, that investment was tumultuous. The shareholder relationship between (QAN) and major Singapore Airlines (SIA) shareholder, Temasek Holdings (which was also a foundation investor in rival Tiger Airways (TGR)) proved uncomfortable.
Temasek exited the airline’s share register in 2009, when Singapore-based Westbrook Investments stepped in to take control of the company, leaving (QAN) with 49%.
Then, in 2007, (QAN) took a 30% stake in a tiny Vietnamese carrier that was relaunched one year later as Jetstar Pacific (PAH). But that venture hit trouble in 2010 when two Australian executives seconded to the airline were prevented from leaving the country while Vietnam investigated losses from fuel hedging.
Jane pointed out that those first two investments were led by (QAN) rather than Jetstar (IMU) and says that since then, the carrier has “learned a lot along the way.”
Under her watch, those affiliates are now leveraging the benefits of being part of the wider group while retaining their individual identities. “We’ve created a group where all businesses benefit from the scale of the group from a cost standpoint, all of the businesses benefit from the scale of the group from a revenue point of view, and all of the businesses benefit from the great brand strength that has been developed,” Jane said. “We have a great consumer proposition that works across the region, and it’s now an integrated collection of businesses.”
Nevertheless, she added: “Each one of the businesses in our portfolio is very localized, and it must be. We’re a minority shareholder in those businesses. We bring great wisdom to the businesses, and scale, but those businesses are locally run at the end of the day.”
The same is true for Jetstar Japan (JJP), which launched in 2012 as the first low-cost carrier (LCC) in the market.
Japan has again proved challenging, however, with the airline coming under additional scrutiny after some Engineering oversights, resulting in regulators delaying approvals for new routes and bases. Nevertheless, Jane sees great potential for the market. “It’s a very positive time in Japan. When you look at the fundamentals, (LCC)s today are roughly 6% of the total market; we’re 60% of that, and we fully expect that (LCC)s will penetrate the Japanese aviation sector as they have in other markets,” she said. “The Japanese consumer is no different than other consumers (they really care about what it costs them to travel between point A and point B.)”
* HONG KONG PLANS
One of the greater challenges for Jetstar (IMU) has been in trying to secure an air operator’s certificate (AOC) for Jetstar Hong Kong (JHK).
Qantas (QAN) (CEO), Alan Joyce announced a plan to team up with China Eastern Airlines (CEA) to launch the new Hong Kong-based budget carrier in 2012. At that point, it was expected that flights would begin in mid-2013.
However, strong opposition from incumbent carrier Cathay Pacific (CAT) has stymied the airline’s attempts to get off the ground. (CAT) argues that, as (IMU)’s affiliates report to a group head office in Melbourne, the carrier’s management control would be outside Hong Kong and thus violate its Basic Law.
(QAN) and (IMU) have tried to counter this with the introduction of Hong Kong conglomerate Shun Tak Holdings onto the company’s share register. Shun Tak Managing Director, Pansy Ho is now Jetstar Hong Kong’s (JHK) Chairwoman and is leading the charge for the (AOC).
Hong Kong’s Civil Aviation Department is expected to rule in early 2015 on whether it will grant the budget carrier an (AOC). The uncertainty has prompted Jetstar Hong Kong (JHK) to sell off six of its nine Airbus A320s.
Despite the delay, Jane said that Jetstar (IMU) and the other shareholders remain committed to seeing (IMU) through and that there is no “plan-B” in case regulators deny its application.
“We’re very-long-term investors, and we believe that the opportunity is significant,” she said, adding that she thought consumers in Hong Kong “deserve” the benefits of increased competition, such as lower fares and more route offerings. “We believe it will succeed over time,” she said.
Complementing the narrow body businesses is (IMU)’s long-haul operation from Australia, which Jane said is “an important part of the network”.
Jetstar (IMU) doesn’t disclose results for its long-haul operations, but Jane said the company is gaining advantage in the market as it moves to a fleet of 14 Boeing 787-8s. “The 787s give us a competitive advantage from a unit-cost position . . . and we have improved the customer experience dramatically in the process,” said Jane.
Although the long-haul fleet is based in Australia for now, Jane pointed out that it has used wide bodies from a Singapore base, and thus could potentially move 787s to its other affiliates, if the right opportunity were to arise. “There are no constraints from our standpoint in how we think about using our long-haul opportunities, but we’re driven by where the opportunities are, where the scale is, and how we best get return on investment for our shareholders,” she said.
Jane attributed a large part of (IMU)’s success to how it works with parent carrier (QAN) under a dual-brand strategy. The strategy in this case is predicated on the idea that the market for leisure travel will continue to drift towards low-cost carriers (LCC)s, while affluent and business travelers will continue to pay the premium to fly on (QAN).
“The interesting thing is, if you look at Jetstar (IMU)’s growth over the last 10 years, that’s as a consequence of having a dual-brand strategy that is focusing (IMU) on staying very true to its intent,” she added.
Nevertheless, (QAN) and (IMU) have received some criticism for lines that have blurred at times. Originally, the carriers avoided operating together on most of their routes, but there has been code sharing between them.
Other opportunities have opened up more recently. In December, (IMU) will begin operating charter flights in Western Australia for (QAN), serving two major mine sites.
Jane said the success of the strategy has given partners such as Japan Airlines (JAL) and Vietnam Airlines (VIE) confidence to pursue the same approach with the Jetstar (IMU) affiliate carriers they are invested in. “We’re the envy of many airlines around the world, because we have been able to do something that was so difficult to achieve and deliver,” she added.
* GROWTH OPPORTUNITIES
Despite the short-term pain the company has felt, Jane said it is well-positioned to ride out the ups and downs of the market. Its portfolio has “significant underlying growth left in it”, she said, and with operations covering the Pacific Rim, it is poised to capitalize on growth opportunities. “One thing that we pride ourselves on is being very fast on our feet,” she said. “We make very quick decisions, we make very good decisions, and we are very long-term minded. What we’ve done is ensure that all of the aspects of running an airline, which are many, are in a position to flex with us and evolve quickly.”
That flexibility has been behind some recent changes to fleet plans. While its airplanes are sourced through Qantas (QAN), the parent carrier recently deferred and converted its remaining A320ceo orders to the Neo, but it maintains a degree of flexibility in its delivery timeline. “All we’ve done is practically wire our fleet order to ensure that we have maximum flexibility and we can draw what we need and not be required to take what we don’t,” she said.
Another key focus for Jane has been improving (IMU)’s customer service. Surveys show that across the board, it has been improving on key areas of customer advocacy, and she added that in a competitive market, delivering good service is paramount. “I think it’s a relatively logical path, because when you’re the only entrant in the low-fares market segment and price is everything, maybe you can just focus on cost and get away with it for a while. But ultimately, you’re competing against other low-fare airlines, and low fares are not enough.
As for Jetstar (IMU)’s future, Jane said coverage across Asia and the flexibility to scale up and down, will allow (IMU) to deliver for many years to come. “We’re driven by market dynamics, and there are things that are outside of our control, but I don’t view the next 10 years as any different from the last 10 years in terms of the opportunity this business has to grow,” she said.
“I think we’re at a period now for the first time, where we can think about the world of possibilities . . . . I think it’s an exciting time.
DAVID HALL, (CEO) JETSTAR AUSTRALIA & NEW ZEALAND.
GRANT KERR, HEAD JETSTAR AIRWAYS NEW ZEALAND.
KEN RYAN, (CEO) JETSTAR ASIA (JSA) (2005-03).
DAVID HALL, CHIEF FINANCIAL OFFICER (CFO).
MS LISA BROCK, JETSTAR GROUP (IMU) CHIEF COMMERCIAL OFFICER (CCO).
DAVID KOCZKAR, GROUP CHIEF OPERATING OFFICER (COO) JETSTAR.
CAPTAIN GEORGINA SUTTON, JETSTAR GROUP (IMU) AUSTRALIA & NEW ZEALAND CHIEF PILOT.
BEVAN COOTE, GENERAL MANAGER (2001-12).
PETE YAP, GENERAL MANAGER NETWORK.
TERRY WILSON, DIRECTOR OPERATIONS (firstname.lastname@example.org).
PETER SHEPHERD, DIRECTOR ENGINEERING, (email@example.com).
ROHAN GARNETT, HEAD CUSTOMER SERVICE & PEOPLE.
TERRY BOWEN, HEAD FINANCE.
NIGEL FANNING, HEAD COMMERCIAL & OPERATIONS IMPROVEMENT, AUSTRALIA & NEW ZEALAND.
TREVOR JENSEN, HEAD TECHNICAL OPERATIONS.
JOHN GISSING, MANAGER FLIGHT OPERATIONS (firstname.lastname@example.org) (2002-10).
CAPTAIN MAURIE MCBAIN, MANAGER LINE OPERATIONS/CHIEF PILOT 717,
WAYNE RICHARDS, MANAGER GROUP SAFETY SYSTEMS.
CAPTAIN PETER DOUGLAS, DEPUTY MANAGER LINE OPERATIONS.
CAPTAIN PHIL STEVENSON, MANAGER TRAINING & CHECKING.
ANDREW PAGE, MANAGER ENGINEERING BASE - NTL (email@example.com).
PETER MOONEY, MANAGER OPERATIONS.
JIM TURLEY, MANAGER OPERATIONS CENTER.
ROLAND BERGER, MANAGER ENGINEERING LINE (BNE) (firstname.lastname@example.org).
JOHN STEVENS, MANAGER LOGISTICS.
SHALEND PRAKASH, MANAGER COMMERCIAL & AVIATION RELATIONSHIP.
ANDREW LITTEN, MANAGER TECHNICAL PUBLICATIONS, (email@example.com).
MARK PHILLIPS, FINANCIAL CONTROLLER (2002-10).
BILL JAUNCEY, HEAD AIRPORTS.