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Old May 7th, 2005, 08:52 PM   #181
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Qantas Announces All-Inclusive Pricing for Airfares
Corporate Press Release
Sydney, 29 April 2005

The Qantas Group today announced that it would move to all-inclusive pricing for its airfare and package holiday advertising from Wednesday, 11 May.

The Chief Executive Officer of Qantas, Geoff Dixon, said the airline had made the decision in support of the Federal Government's recent announcement that it would amend the Trade Practices Act in relation to component pricing in a number of industries.

"We will be making the change to our advertising ahead of any change to the Act, in the interest of establishing consistency for our customers as quickly as possible," Mr Dixon said.

Qantas currently provides a breakdown of costs in its advertising, providing the base airfare with taxes and charges listed separately.

"We are aware that, with airfares often very low in comparison, customers want the total cost of their purchase clearly spelled out."

Qantas, QantasLink, Australian Airlines and Jetstar will all move to the new advertising style.
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Old May 7th, 2005, 08:55 PM   #182
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^thats beacouse it has to, the law came through just a few days ago ..
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Old May 8th, 2005, 05:23 AM   #183
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Rescue officials say plane with 15 people aboard crashed in northern Australia
By ROD McGUIRK
7 May 2005

CANBERRA, Australia (AP) - A plane carrying 15 people slammed into a hillside in Australia's remote far northeast on Saturday, probably killing all on board in the nation's worst air disaster in almost a decade, authorities said.

The twin-propellor plane was heading for Lockhart River, an Aboriginal community of 350 people in Queensland state known as an artist colony.

Its wreck, burning in dense tropical forest on the side of a hill 11 kilometers (seven miles) from the plane's intended destination, was spotted late Saturday by a search aircraft, Australian Search and Rescue spokeswoman Tracey Jiggins said.

"It's impossible to say at this stage if there's been any survivors. It appears unlikely though," Jiggins told The Associated Press.

Peter Gibson of the Civil Aviation Safety Authority told Australian television's Nine Network the plane had been flying in rain, low clouds and moderate winds when it slammed into the side of the hill.

The Fairchild Metroliner plane, operated by north Queensland-based airline Aero-Tropics, had been due to arrive at Lockhart River at about midday. It had radioed it was about to land before the crash, police Superintendent Michael Keating told reporters.

Two pilots and 13 passengers were aboard, Jiggins said.

The aircraft was en route from Bamaga, a community of 2,000 near the tip of the Cape York Peninsula, about 280 kilometers (170 miles) from Lockhart River, she said.

Keating said Sunday 20 emergency response personnel would be flown to Lockhart River by noon (0200 GMT) and federal accident investigators would accompany them to the crash scene.

"The weather may be a factor; we just don't know at this stage what the cause of this incident is," Keating told Seven Network television.

He said most of those on board were from the city of Cairns, almost 1,000 kilometers (620 miles) south of Bamaga. Others were from far north Queensland, the state capital Brisbane and southern Australia, he said. The passengers included a state police officer, he said.

No names have been released.

The crash was Australia's worst air disaster since two army Black Hawk helicopters collided near the Queensland city of Townsville, killing 18 people in 1996. It was also Australia's worst civil air crash since 1968, when an MMA Viscount crashed near Port Hedland in Western Australia state, killing 26.
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Old May 8th, 2005, 07:28 PM   #184
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Airlines stand by for turbulence on pricing
Nick Galvin
7 May 2005
The Sydney Morning Herald

Qantas, Virgin Blue and Jetstar will be anxiously watching the behaviour of air travellers after the carriers agreed to advertise "real" fares and end the controversial practice of hiding extra fees and charges in small print.

Yet this apparent leap in fares could bring some bargains for travellers - in the short term.

Aviation analyst Peter Harbison said the airlines might have to "absorb a bit of pain" in falling ticket sales as travellers digested the new headline prices.

"I think they [the airlines] will probably watch for a few days to see what the impact is," Mr Harbison said. "If they do see people walking away from these prices they will probably introduce some $1 net fares to make sure people get back flying."

None of the major carriers would be drawn on their plans to counter any temporary downturn in sales, but Jetstar's Simon Westaway said the airline would "try to keep something back".

"We've got to continue to keep the market excited," he said. "We've got to continue to keep the consumer interested - clearly the move to all-inclusive pricing will see a different headline price out there."

The moves were forced on the airlines when the Treasurer, Peter Costello, last month foreshadowed changes to the Trade Practices Act to stamp out the practice of two-part or "component" pricing in aviation and other industries.

The extras loaded on to a domestic fare include fuel surcharge, baggage screening tax, domestic head tax and GST.

Virgin Blue was this week advertising a Sydney-Melbourne fare for $29. However, the actual fare was $68 when $39 in extras was taken into account.

Virgin Blue spokeswoman Heather Jeffery said the airline, which moves to all-inclusive pricing on Tuesday, was only forced into two-part pricing to compete with Qantas. "We think one-price, all-inclusive fares is the honest way to advertise," she said.

Qantas said it would change its policy from Wednesday. "We are aware that, with air fares often very low in comparison, customers want the total cost of their purchase clearly spelled out," said its chief executive, Geoff Dixon.

It's a move the Australian Consumers Association has long advocated. "They [the airlines] are treating the consumers like idiots," said the association's Norm Crothers.

"If you caught a taxi from your home to the airport tomorrow and the taxi driver says it's $5 to the airport and then when he got there he said, 'This is the airport parking levy, this is the registration, this is the insurance, this is the third-party insurance, this is the fuel levy', you wouldn't be very happy - you'd probably thump him. But this is what the airlines are doing - they are applying that sort of stunt and we put up with it."

However, it may not all be good news for the consumer. Folding fees, charges and levies back into one fare reduces the visibility of the extra imposts.

"There is one good side to having charges isolated in that way," said Mr Harbison. "That is that the public is made very much aware of how much it is being held to ransom by the Federal Government and the airports."

TAKING FLIGHT

A typical Qantas Sydney-Melbourne flight sold through Flight Centre costing $120.45 includes the following taxes and levies:

$10.95 (GST)
$24.18 (fuel levy)
$2.59 (safety and security charge)
$7.73 (domestic passenger service charge)
Source: Flight Centre
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Old May 10th, 2005, 05:11 PM   #185
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Qantas Says Jetstar Unit Considers Asian Destinations
9 May 2005

SYDNEY (Dow Jones)--Jetstar, the Australian discount airline operated by Qantas Airways Ltd. (QAN.AU) is considering launching services to several destinations around the region, including the Indonesian tourist island of Bali.

"Asia is definitely in the frame and has a lot of potential," Jetstar corporate affairs manager Simon Westaway said Monday.

"There are some destinations thoughout Asia that we see a great deal of interest," Westaway said.

While he declined to put a time frame on any possible push into Asia, Jetstar chief executive Alan Joyce said early last month that the group wanted to be flying short-haul international routes within two years.

Westaway said the airline is scheduled to take delivery of another two Airbus A320s shortly, which will be in the sky in July. It will be operating a full fleet of 23 of the A320 planes, which are capable of comfortably flying five-and-a-half hours, by mid-2006.

"That means there are destinations in Asia which the A320 is capable of reaching," he said.

"But we've still got a lot of work to do, and we are working through the regulatory framework," he said.

He also said Jetstar is close to launching services to New Zealand and while the group is still finalizing overall plans for the market, including possible destinations and schedules, Westaway said Jetstar could be flying across the Tasman as soon as September.

"We are pretty well advanced with the New Zealand markets we seek to enter," Westaway said. "We will seek to be in the market sooner rather than later," he said.

The carrier's expansion will add to the already-fierce competition on trans-Tasman routes, with Qantas, Air New Zealand Ltd. (AIR.NZ) and Virgin Blue Holdings Ltd.'s (VBA.AU) Pacific Blue offshoot along with Emirates Airlines (EA.YY) already offering Australia-New Zealand services.

"We are working through with Qantas as to how to best we can fit into the mix," he said.

While he declined comment on how Jetstar would work with and compete with Qantas, he noted that Jetstar already competes against Qantas on several key routes.

"We will compete vigorously in any market we enter, and we would treat the trans-Tasman market as we would treat any other," he said.

Meanwhile, Westaway said the carrier remains committed to launching services to other domestic destinations, including Perth.

"We haven't put a date on it but we will in that market at some point in time, but I think we are looking at a 2006 proposition for the west," he said.
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Old May 11th, 2005, 10:19 PM   #186
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Plane's warning system too late
10 May 2005
The Australian

AN aircraft that crashed in north Queensland at the weekend, killing all 15 people on board, was about to be fitted with a sophisticated warning system that could have prevented the crash.

An enhanced ground-proximity warning unit that would have alerted pilots that they were flying towards dangerous terrain was required to be installed by June 30 as part of a mandatory nationwide safety upgrade for all passenger aircraft.

The Aero Tropics Metroliner slammed into the 400m-high South Pap ridge on Saturday after failing to clear its jungle-covered crest by just 50m while preparing to land at the Lockhart River Aboriginal community on Cape York Peninsula.
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Old May 11th, 2005, 10:21 PM   #187
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Cut-price fares just the start for Jetstar
Stephen Dabkowski
10 May 2005
The Sydney Morning Herald

Now it's gunning for the upmarket end of the market. Stephen Dabkowski reports.

Phase two of Jetstar is about to begin. Having established itself as a profitable cut-price airline, Jetstar is now going upmarket, offering something new in a major marketing campaign to be unveiled to coincide with its first birthday on Saturday, May 28.

The new campaign will still concentrate on low fares, but will also emphasise hot meals to be served from July and the introduction of frequent flier points and onboard entertainment.

The blurred lines between itself and owner Qantas will become even hazier.

That will also allow Jetstar to begin its international operations to New Zealand and other destinations in Asia, taking over Qantas routes where necessary.

Yesterday the official line was that operations to New Zealand would certainly begin later this year - but September, as some news reports suggested, was too ambitious.

Jetstar's shift to a broader market follows a new strategy from Virgin Blue, inspired by its new owner in Chris Corrigan's Patrick Corp.

The battle for the business traveller is about to shift the focus from just a price war. Discount airfares as low as $1 may soon be a thing of the past.

Jetstar's new marketing campaign is still being finalised by Melbourne agency Dewey & Horton.

Ted Horton (the man behind the last four Liberal Party election advertising campaigns, including last year's interest rate scare strategy) says the establishment of the Jetstar brand has allowed the airline to expand its reach.

"It was the most successful launch of an airline anywhere in the world last year," he boasts.

Jetstar's website records about 20,000 hits a day and the company has grabbed a 10 per cent share of Australia's aviation market.

The multi-million dollar advertising campaign planned for the end of the month followed a $15 million advertising blitz which accompanied the airline's launch.

The creative team behind Jetstar has always been small, led by chief executive Alan Joyce, but effective. Plans for the new airline began in secret in Sydney in December 2003, when 12 focus groups around Australia were quizzed about what sort of discount airline they might support.

A handful of executives, led by Joyce - and with Horton advising in the background - worked from a small office in Sydney's CBD, away from Qantas headquarters to keep the new airline secret.

The focus groups were clear what they wanted.

"What we found were a few characteristics they wanted from an airline," Joyce says. "They wanted a professional airline which had safety and security taken for granted. Being part of the Qantas group was a big advantage for us, so we wanted to make it clear that we are part of the group.

"They also wanted an airline to project an Australian image - they wanted an open, accessible and egalitarian airline. They also wanted us to have an image of fun as well."

Based on this research, Horton offered only one option as the face of the airline - Magda Szubanski.

"Magda is much loved and she's also fun. We couldn't allow ourselves in an image sense to compete with Qantas. We needed something different. Everyone warms to all the characters played by Magda (including Sharon in Kath & Kim) and we knew she would be a great fit," Horton recalls.

Without overtly saying so - Jetstar was also trying to get as far away as possible from Virgin Blue's sexy air hostess image.

The next two tasks were to agree upon a name and colour for Jetstar.

"We wanted a name which linked it back to Australia," Joyce says. "The star in our logo comes from the small star on the Australian flag. It is the only five-pointed star on the flag, representing our small, humble beginnings."

While they were researching names, Jetstar's marketing team broke them into four categories - Australian-orientated (Ozjet - now taken up by Paul Stoddart - and Aussie Airlines), quirky (Wow Airlines, Bravo One), low-fare (Fare Go airlines, Fares Fair Airlines) and those revolving around the word jet.

"Jet in the name worked because people like the cleanness of it, so we were considering Jetone, Jet X, Jet Black and even Jet Stream," Joyce says. "But in the end we kept coming back to Jetstar. Jet worked all the time with focus groups because it described in a single word we are an airline."

Next came the colour. The executive team at Jetstar tested purple, black and silver before deciding on orange.

"We picked orange because no-one owned orange in the marketing environment and it is a colour which stood out, particularly in ads and it reduced print costs because you are only using one colour," Joyce recalls.

As it turned out, orange is also the favourite colour of Qantas chairwoman Margaret Jackson. The decision quickly got the board's rubber stamp.

Jetstar is a fully owned subsidiary of Qantas and was formed out of the defunct Impulse Airlines.

Qantas took over 14 near-new Boeing 717 twin-jets in 2001 from Impulse. Those aircraft, plus six new Airbus A320 planes, now operate under the Jetstar banner on east coast routes. Seventeen more A320 aircraft are due to be put into service in the next year - an indication of how confident Jetstar is of achieving its growth strategy.

Joyce and his team have not finished refining the marketing message yet. The next round of ads will revolve around the airline offering hot meals and possibly even inflight entertainment.

"But one thing is for certain - we will never deviate far from our simple message, which has been the core of our success, which is low fares. The game plan is clear for us," Joyce says.
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Old May 12th, 2005, 04:30 AM   #188
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Australia to launch direct flights to Antarctica

SYDNEY, May 11 (AFP) - Direct flights to Antarctica will soon be available from Australia after the government announced Wednesday it will build a 3.6 kilometre (2.2 mile) runway at one of its bases.

The flights would leave from the southern island state of Tasmania, with trial trips expected to be operating by 2006-2007, Environment Minister Ian Campbell said.

The government would spend 46.3 million dollars (35.9 million US) over four years building the glacial blue-ice runway and supporting the air link between Hobart and Australia's Casey station which lies about 2,500 kilometres (1,553 miles) from the South Pole, the minister said.

Tasmania is already the base for Australia's research on and shipping services to Antarctica and the government wants to encourage other international programmes to use the state as the base for their activities.

The air service would use long-range, jet aircraft which could fulfill the dual function of carrying out surveillance on Southern Ocean fisheries during the 9-10 hour return trip, Campbell said.

"Australia claims 42 per cent of Antarctica -- but unlike many of our counterparts, has no efficient means to access the continent," the minister said in a statement.

"The air link... will improve access to Australia's research stations. This will in turn cut the time it will take to gather and relay important data."

The 3,440 kilometre (2,138 mile) link will also allow quick access to Australian stations in the event of an emergency.

However, leader of the Greens opposition party in Tasmania Peg Putt said the air link could increase tourism and lead to damage to Antarctica's wilderness.

Australia's Antarctic team has used two aircraft, ski-equipped CASA-212 twin-engine turboprop aircraft, to travel between its three bases on Antarctica since December 2004.
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Old May 14th, 2005, 05:38 AM   #189
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Jetstar on top in Virgin blue
Steve Creedy
13 May 2005
The Australian

The airline's CEO is showing how it's done, writes Steve Creedy

LOW-COST carrier Jetstar expects to have a 12per cent market share by the end of the financial year, driving another nail into Richard Branson's boasts that Virgin Blue could take 50 per cent of the market.

As the Qantas offshoot approaches it first birthday on May 25, Jetstar boss Alan Joyce is thumbing his nose at the naysayers who claimed starting a low-cost subsidiary of a full-service airline was a recipe for disaster.

The carrier has emerged from a sometimes rocky launch to become a significant player in the market and a big thorn in the side of Virgin Blue.

It is already making money, with earnings before interest and tax of $19 million for the first half of 2004-05, and Joyce saying profitability remains "ahead of expectations".

It also expects to beat passenger predictions and carry about 4 million people in its first financial year.

Operationally, it is achieving turnaround times of less than 30 minutes and its on-time performance has consistently topped the other major players. Dispatch reliability on its A320s is said to be ahead of the Airbus global average.

Joyce is particularly pleased the carrier is now widely recognised among eastern state travellers, including trendy "prosumer" 18 to 30-year-olds that Qantas has trouble reaching.

"The research we've done in the eastern states shows we're now up to 90 per cent recognition, which is very important for a retail business," he says. "When you want to get people to come to jetstar.com they just have to know the name.

"We're also getting the characteristics that we wanted out of the brand -- ownership of the low fares, which is crucial, but also to be seen as fun, egalitarian and Australian."

Looking back over the first year, Joyce nominates the celebration of the airline's two millionth passenger and the enthusiasm of the airline's staff as the high points.

He is also pleased one of his riskier strategies -- flying to Victoria's Avalon Airport, near Geelong -- appears to be paying off.

The airline expected to get 250,000 to 300,000 passengers through Avalon in the first year of operation but looks like hitting about 400,000.

Joyce says research shows about 30 per cent is traffic that would otherwise have flown through Melbourne's Tullamarine Airport but switched to Avalon because it was cheaper.

Another 30 per cent comes from Avalon's natural catchment of Geelong and Melbourne's western suburbs and the rest is interstate traffic heading for tourist attractions such as the Great Ocean Road.

The airline says much of its growth has been through developing new leisure markets and attracting people who previously were not flyers.

However, March traffic figures showing a fall in Qantas mainline domestic traffic and passenger numbers suggest there has been an element of cannibalism.

Nonetheless, Joyce hails the strategy as a success.

"I think one of the great things about the Jetstar strategy is that it really did define the marketplace here in terms of Jetstar and Virgin being the budget airlines and Qantas being the full-service airline," he says.

"Qantas got a halo effect there; the research said that people just saw it differently after the entry of Jetstar, and the strategy slowed down Virgin's growth in the overall domestic market. Jetstar and Qantas mainline are making money domestically and are growing.

"For the first time, we've now got Virgin thinking that they are not going to go up to 50 per cent market share. They're happy with 35." Of course, not everything has been smooth sailing.

Jetstar started out with no frequent-flyer scheme but was forced by a customer backlash and a fear it would lose business to Virgin to offer Qantas points on its fully flexible fares. It also now gives customers with more expensive tickets priority boarding, although it plans to retain unallocated seating for reasons of efficiency.

The airline buys the points from its parent but says it recovers costs by prompting people to buy more expensive tickets and attracting back customers.

Joyce, who was keen to pre-empt Virgin's long-awaited move to introduce a frequent-flyer scheme, says the Jetstar program has produced a revenue gain that offset its cost.

"What we've found is while it is costing us money and it will increase our cost base in having it, what we are getting out of it is that we have captured back on some routes, the big business routes, an immense amount of the business traffic that I think we lost," he says.

Another backlash prompted changes to the carrier's controversial policy that people who failed to check in on time lost their tickets.

Jetstar still closes flights 30 minutes before departure but now charges a fee of $50 for individual latecomers and $100 for families to book on another flight.

"We were too harsh at the start and it was causing us a couple of difficulties," Joyce says. "With the passengers, I think there was a danger that they went over to Virgin ... because they were so pissed off with Jetstar."

However, Joyce has no plans to rest on his laurels. Now bedding down its existing network, Jetstar is planning new services to the Northern Territory, Perth and New Zealand by the end of the year or early next year.

It continues to grow as it replaces its fleet of Boeing 717s with 177-seat Airbus A320s. The bigger planes will allow it to reduce frequencies on some leisure routes and redeploy the aircraft to new destinations.

It is already 2 1/2 times the size of Impulse Airlines and expects capacity in terms of available seat kilometres to grow by 30 per cent in its second fiscal year.

So far it has added eight A320s and will bring on board another 15 by the middle of next year. It has applied to the Civil Aviation Safety Authority for extended twin engine operations certification that will allow it to take a shorter route to Perth and also fly overseas.

New Zealand will be the airline's first international destination but Joyce says it will look at other possibilities -- such as Bali or the South Pacific -- within the four to five-hour range of its aircraft.

'We are adding extra features that give people the choice but don't increase our cost base' Alan Joyce Jetstar CEO Joyce says a big element of the trans-Tasman market has become price-sensitive and there are several destinations ideally suited to the low-cost carrier. But he says reports that the airline will launch transTasman services by September are "too aggressive".

"There's a possibility that will happen this year - let me phrase it like that - and New Zealand will be the first off the rank," he says.

The airline will launch a new advertising campaign, also featuring Magda Szubanski, to coincide with its first birthday. Joyce says Jetstar's top objective and customer proposition remains price.

But he believes the new features such as the portable digEplayer video-on-demand unit will make longer sectors more palatable to customers and help counter Virgin's moves to upgrade its offering .

"We are adding extra features that give people the choice but don't increase our cost base," he says.

"They are the in-flight entertainment, the digEplayer, and the first one will be on an aircraft, we hope, on our birthday on May 25.

"Then we have hot meals appearing and we also have added features appearing on our website, vouchers and opportunities for people to prepay for activities."

It plans to put the digEplayers on A320 flights longer than 75 minutes, charging $5 for a journey lasting up to two hours and $10 for a longer trip.

Joyce is confident the devices will be a winner for the airline, despite a decision by European low-cost operator Ryanair to abandon them.

"Ryanair only has very short markets and we think the take-up will be bigger here," he says.

"The digEplayer people are very confident and we've gotten a very good deal out of them that's a very low-risk profile for us."

Looking at challenges coming up, Joyce quickly nominates fuel prices, the economy and, of course, the battle with arch-rival Virgin Blue.

He views Virgin as an aggressive competitor and says the airline's move to pre-empt the arrival of Jetstar by boosting capacity led to hard-fought battles in several markets.

"We've got a lot of growth coming in and that's always a challenge for us, picking the right markets at the right time and the competitive environment around that," he says.

"But I think we've doneOKin the last year and hopefully we can continue with the successes by picking the right destinations."
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Old May 14th, 2005, 06:28 AM   #190
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I just hope the Australian market sustains 3 carriers. It would be a shame to see one of them die off.
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Old May 14th, 2005, 06:31 AM   #191
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It's quite interesting watching the Australian aviation market. For a country of about 20 million, 3 main airlines is quite a lot of competition.
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Old May 14th, 2005, 09:31 PM   #192
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Qantas push for cameras
Steve Creedy
13 May 2005
The Australian

QANTAS will ask for changes to workplace laws so it can legally install covert surveillance equipment to monitor baggage handlers and other airport staff.

Most states have workplace surveillance legislation that prevents Qantas from carrying out covert surveillance inside aircraft.

The airline's head of security, Geoff Askew, said it had extensive camera surveillance in its baggage area but these were positioned where the staff could see them. Qantas now wants to increase that surveillance and add hidden cameras in aircraft holds.

"What we're seeking is co-operation from the state governments to review that legislation to carry out covert surveillance where we deem appropriate," Mr Askew said.

Qantas security came under scrutiny again this week after Australian Federal Police linked a cocaine-smuggling operation to baggage handlers at Sydney International Airport.

Mr Askew said the difficulty with installing hidden cameras in aircraft was that the planes travelled between states. "That's why we need a whole-of-government solution and not just one state," he said.

Qantas is also talking to the federal Government about increased screening for employees in baggage handling.

At present some workers with the appropriate security clearance do not need to go through screening.

Mr Askew said the airline would continue investigating all facets of baggage handling and airport security, as well as a program of ad hoc employee searches. But he said it was important not to overreact to the drugs controversy.

Qantas chief executive Geoff Dixon said the airline regretted the drug-smuggling allegations but defended the carrier's operational and security procedures as among the world's best.
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Old May 15th, 2005, 06:11 AM   #193
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Lightening pilots' loads - Jetstar Case Study
Kelly Mills
10 May 2005
The Australian

PDAs are reducing an airline's turnaround times, says Kelly Mills

LOW-COST airline Jetstar is using handheld devices to boost its bottom line by shaving critical minutes off the time it takes to get its aircraft in the sky.

Time is money to airlines and Jetstar operates on a 25-minute turnaround schedule.

Reducing this time over a number of sectors could boost the airline's balance sheet, Jetstar flight operations fleet technical support manager Captain Maurie McBain says.

"The quicker you can turn an aircraft around, the more flying you can do during the day and the more money it makes for the company," he says.

"If we can reduce the turnaround time by just a couple of minutes, over eight to 10 sectors, we may save between 10 and 20 minutes per day." Pilots working for most of the world's low-cost airlines must calculate manually the aircraft's weight and balance before takeoff, unlike bigger airlines, which receive this information automatically from a load control centre.

Taking into account an aircraft's empty weight, fuel on board, passenger load and baggage weight, a pilot works out the aircraft's weight and balance for takeoff.

To comply with Civil Aviation Safety Authority regulations, airlines must keep all load charts on file for three months.

Most budget-priced airlines use a paper-based system for all this.

McBain says Symbol PDAs, introduced last May when the airline was launched, has reduced mistakes.

Under strict audit requirements, Jetstar conducted a small survey of pilots to see how long they took to fill in the complex form.

"We got a bunch of pilots in and gave them some data and asked them to produce a load chart as quickly as they could," he says.

"This was under controlled circumstances, sitting at a desk instead of on a flight deck, which is a bit more hectic. About 80 per cent of the people had made some sort of mistake." Captain McBain said most of the mistakes were minor and along the lines of ticking a wrong box or not ticking at all, rather than inaccurate calculations.

The study showed production of the charts could take between seven and 20 minutes.

"When you're trying to turn a plane around in 25 minutes you want the calculation to be quick. The PDA gives us speed and accuracy," McBain says.

Qantas-owned Jetstar uses about 30 handheld devices, one for each of its 22 aircraft, and has spares at each airport and at head office.

The hardware cost more than $100,000 but the program to calculate weight and balance was developed in-house.

PDAs are used to calculate the load chart, but pre-flight processes are still manual.

Information from the baggage area about the number of bags loaded into each compartment of the aircraft, and from the customer service officer on the number of passengers on board, are given to the pilot on paper before takeoff.

This information, and the quantity of fuel on board, together with the aircraft's operating weight already stored, produces the load chart.

"Realistically from start to finish you could do a load chart quite comfortably in three to four minutes," McBain says.

The pilot prints out the chart on a mobile thermal printer, signs it off and gives it to the customer service officer for filing.

McBain says Jetstar is considering other uses for the PDAs.

"We hope in the future to use the PDAs for pilot records, showing the number of takeoffs, night flights, etc, that they do," he says.

At present this information is recorded manually.

"We are hoping to produce a program that tracks this information so that at the end of the day the pilots just dock the PDA and the information will go to our operations department," he says.

Baggage handlers may also be equipped with PDAs so they can send information to pilots using Bluetooth.

McBain says the airline is considering a study later this year to see if this would be worthwhile.

McBain says Jetstar is planning to use the PDAs to track fuel usage. After an aircraft has been fuelled, a receipt is issued and at the end of the day a log is filled out, with the information passing to a clerk in Melbourne, who reconciles the entries against bills from the oil companies.

THE PROBLEM

Jetstar needed to keep its costs low, which meant pilots had to manually conduct pre-flight checks.

THE PROCESS

To minimise airport turnaround times the airline needed to automate the production of load charts by pilots.

THE RESULT

A program using Symbol handheld devices enables pilots to complete load charts quickly and pay greater attention to other pre-flight checks.
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Old May 15th, 2005, 06:51 PM   #194
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Two die as light plane crashes and bursts into flames
16 May 2005
The Australian

TWO men were killed last night when their light aircraft crashed and exploded into flames about 100km north of Adelaide.

The two-seater single-engine aircraft crashed into a paddock at Stonefield, near Truro on the cusp of the Barossa Valley.

Police were last night investigating the charred wreckage of the plane to identify its occupants, believed to be a 17-year-old youth and a 63-year-old man from Adelaide.

The tragedy happened only metres from an airstrip, and it is believed the pilot was trying to take off at the time of the accident.

The Australian Transport Safety Bureau is sending a team from Canberra this morning to investigate the cause of the crash.

Three police officers guarded the site overnight until the bureau's investigators arrived.

A police spokesman last night said the cause of the accident was unknown.

"We have no ideas as to the cause at this stage, but we will prepare a report for the state coroner and the ATSB will investigate into the cause.

"It happened about 20-30km out of the Barossa Valley ... the weather was fine, it was a clear day." The spokesman said the victims' families had been informed but would not confirm if the pair were related.

The accident comes just over a week after 15 people were killed in the Lockhart River air disaster, Australia's worst plane crash in almost 40 years.

In that crash, an Aero-Tropics Metroliner slammed into a 400m-high ridge while preparing to land at Lockhart River on Cape York Peninsula. Investigators are examining the plane's black box and in-flight voice recorder, looking for a potential cause of the crash.
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Old May 15th, 2005, 06:53 PM   #195
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Jetstar may have to fasten its seatbelt
Tansy Harcourt
16 May 2005
Australian Financial Review

The carrier is approaching a difficult growth phase, writes Tansy Harcourt.

Behind the secure doors of Jetstar's head office in Melbourne, a large model of a Virgin Blue aircraft sits for all staff to see.

For Jetstar chief executive Alan Joyce, keeping the competition in sight is a critical component in the budget airline's success.

"Virgin Blue is constantly the major focus. If I ask one of our revenue managers what the lead-in fare on Brisbane-Rockhampton is for Virgin on Tuesday I expect them to know it straight away," Mr Joyce said.

And they do. Mr Joyce estimates that Qantas-owned Jetstar and its arch rival Virgin Blue keep such a close eye on each other's air fares that within an hour of either one of them setting a new price, the other has reacted.

"You've really got to know what the competition is. If we put a fare in the market they will match it or react to it within an hour," Mr Joyce said.

Tough head-to-head competition between the two discount carriers has been a boon for consumers, who are benefiting from an extended period of discount air fares without precedent in this country.

But the air fare war has had a far more sinister impact on the profit growth prospects of Australia's airlines.

So far Virgin Blue has been the only one to stumble, while Jetstar and parent Qantas appear to have avoided the turbulence.

While Jetstar produced a better-than-expected first-half operating profit of $19 million, rival Virgin Blue will reveal this week as much as a 15 per cent drop in full-year profit.

The airline, now controlled by Chris Corrigan's Patrick Corp, has suffered from the brutal price war, soaring oil prices and too fast an increase in capacity.

At first glance the two airlines appear to be travelling in opposite directions on the path to success or failure. But the reality is that Jetstar like Virgin Blue, a phenomenally successful start-up is just about to enter the same difficult growth phase that caused its rival to come slightly unstuck.

Jetstar has ambitious growth plans that include video-on-demand and international flights by the end of calendar 2005. The airline is targeting a capacity increase of 30 per cent in 2006, including flights to New Zealand.

To be sure, it's a slower rate than Virgin Blue's 60 per cent capacity growth last year, but it's still enough to cause a few logistical headaches.

Mr Joyce said he was well aware of the challenges facing Jetstar in moving from successful start-up to established carrier.

"What we have to do is digest that growth," he said.

"There are a few factors that are critical: keeping the efficiencies and making sure we don't get bloated as a result of growing too fast, picking the right routes, and the third thing is that we are part of the Qantas group and we don't want to cannibalise them."

The third point, cannibalisation, has been a problem for flagship carriers such as British Airways after starting low-cost airlines.

So far Qantas and Jetstar have managed to divide the market nicely so that the high-yielding passengers on key Qantas routes such as the busy business route of Sydney-Melbourne stay with the main carrier, while the holiday travellers on routes such as Melbourne-Gold Coast are pushed onto Jetstar.

The strategy has helped Qantas pull down its overall domestic costs per seat and contributed to its strong profit result for the half year.

But analysts believe the decision to switch some Qantas services to its lower-cost carrier has annoyed many once-loyal passengers and provided an opportunity for Virgin Blue.

"We believe that Qantas's domestic stranglehold is eventually subject to challenge from a fuller-service version of Virgin Blue," said Merrill Lynch analyst Simon Mitchell.

Virgin Blue has started making moves on Qantas's high-yielding business customers.

In the past few months it has announced flexible, refundable tickets, and it is working on its own frequent-flyer program.

Under the close watch of new majority shareholder Patrick, the airline is expected to keep a better eye on costs and productivity than it has in the past few years.

While the two airlines eyeball each other and look for the next way to get ahead, their paths appear to be moving closer together.
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Old May 16th, 2005, 11:34 PM   #196
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Hopes for air alliance revived
Scott Rochfort
17 May 2005
The Sydney Morning Herald

Qantas and Air New Zealand won a consolation point in their campaign to form a trans-Tasman alliance yesterday when the Australian Competition Tribunal overturned the local competition watchdog's September 2003 rejection of the deal.

Qantas abandoned plans to take a 22.5 stake in Air NZ eight months ago after New Zealand's High Court supported a similar rejection of the alliance by the NZ Commerce Commission.

But the competition tribunal yesterday ruled in favour of the airlines, reviving talk that some form of deal might be resurrected in the future.

In handing down the tribunal's ruling in Sydney yesterday, Justice Alan Goldberg said the decision had been swayed by the growing competition from Emirates and Pacific Blue over the Tasman.

"We were satisfied that Emirates has made a commitment to the trans-Tasman market at least for the five-year period for which authorisation was sought, and that Pacific Blue is committed to the trans-Tasman market, and that both airlines would attract passengers from Qantas and Air New Zealand if the alliance sought to raise its prices or restrict its capacity," Justice Goldberg said.

"Although we reach a different conclusion to that reached by the [Australian Competition and Consumer] Commission, it should be pointed out that at the time the commission made its determination, Pacific Blue had just started its trans-Tasman flights and Emirates had not sought to promote its brand and build up its schedules across the Tasman in the manner it did between the time of the determination and the time at which the hearing commenced," he said.

The ACCC rejected the proposed Qantas-Air NZ alliance in September 2003 on the grounds it would result in higher air fares and less choice for travellers.

This was one month after Emirates entered the trans-Tasman route and well before Pacific Blue started its maiden Brisbane to Christchurch flight in January 2004.

"We will continue to talk to Air New Zealand about opportunities without breaching competition laws," a Qantas spokesman said.

Qantas and Air NZ said they would read the tribunal's findings before making further comment.

Air New Zealand's head of corporate communications, Mike Tod, said: "We will not be making any comment until we digest the contents [of the findings]."

Chief executive of the Centre for Asia Pacific Aviation's consulting arm, Andrew Miller, said the tribunal's findings would boost Qantas and Air NZ's arguments that they are disadvantaged against "hub" carriers such as Singapore Air and Emirates.

Despite the NZ High Court killing the alliance last September, Mr Miller said the tribunal's ruling would give a clearer picture for both airlines on where they could go next.

Both airlines have continually hinted about cooperating in some operational areas.
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Old May 17th, 2005, 06:47 PM   #197
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Virgin denies it is about to start a loyalty program
Rhys Haynes and Liliana Molina
18 May 2005
The Courier-Mail

DESPITE market speculation, low-cost carrier Virgin Blue Holdings has denied it will launch a $60 million frequent flyer program as part of its profit announcement today.

Market analysts have speculated the airline could spend $60 million to start up a loyalty program to build market share and increase its passenger load factor -- the amount of paying passengers it carries on average -- by 5 percentage points over five years.

The speculation comes as the airline is expected to post lower annual earnings, in line with guidance.

It will be the first report from chief executive Brett Godfrey since ports operator Patrick Corp increased its stake in the airline to take majority control in April. Mr Godfrey said the company had been looking at the loyalty program idea "for some time".

"But we are not going to be announcing anything like that," he said.

Analysts say the profit announcement will be examined for signs of a change of strategy or business model driven by Patrick chief Chris Corrigan to boost the airline's earnings. Mr Godfrey acknowledged the company had to focus more on its "bread and butter" but denied Patrick Corporation's 65 per cent share impeded its introducing new products.

"I'm very entrepreneurial," he said. "Chris (Corrigan) is probably less so. But in terms of the things we do it's initiated in our business development unit."
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Old May 18th, 2005, 04:55 AM   #198
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Australia's Virgin Blue FY net profit hit by fuel costs, competition
17 May 2005

SYDNEY (AFX) - Virgin Blue Holdings Ltd said its full year net profit was hurt by increased fuel charges as well as greater competition following Qantas Airways Ltd's start up of rival low-cost carrier Jetstar a year ago.

Virgin, now majority owned by transport logistics group, Patrick Corp Ltd, reported net profit for the year ended March 31 fell to 138.24 mln aud from 158.5 mln a year earlier.

The result was in line with the budget carrier's previous guidance that its annual net profit would be below last year's result by 10-15 pct.

In a statement Virgin Blue said its financial performance in the year to March 31 was affected by record increases in the cost of jet fuel and the continuing escalation of airport charges.

Total operating costs rose 28.6 pct to 1.47 bln while revenue rose 22.5 pct to 1.67 bln.

Virgin Blue said these challenges will be carried forward into 2005-06, with the dual threats of record fuel prices and continuing yield pressure foremost.

'Guidance given by management earlier this year has changed little, and the uncertainty of unchecked airport pricing only adds to these concerns,' the airline said.

But it remains optimistic, saying that in the highly competitive domestic environment, Virgin Blue maintained its 2004 position, controlling one third of the market.

In contrast, it said Qantas' market share dropped to just over 50 pct, having passed some 12 pct of its share to Jetstar during the last 12 months.

Virgin Blue said the next 12 months will be a period of consolidation for the company, with more moderate levels of capacity growth planned, down from the growth of 50 pct experienced in 2003-04 and 40 pct in 2004-05.

It said less capacity growth will allow the airline to focus on product and service development, and on improving the quality of its revenue streams.

'Having secured over 30 pct of the Australian domestic market, we are now focused on strengthening our network, developing our product for the business market and steadily building our presence as the low-fare value-based carrier in our region,' Virgin Blue chief executive officer Brett Godfrey said in a statement.

'We now have the size, scale and frequency to truly address the needs of Australia's business travellers, and we are determined to bring even greater value to business travel, just as we brought lower airfares permanently to the leisure market.'

Godfrey said the airline will introduce further innovative initiatives this year that will help drive higher yielding business while keeping its cost base competitive, 'and ensuring it does not lose touch with the price sensitive leisure segment'.

(1 usd = 1.32 aud)
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Old May 19th, 2005, 04:59 AM   #199
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Selling a cheap, upmarket airline
ELIZABETH KNIGHT
19 May 2005
The Sydney Morning Herald

Virgin Blue's chief executive, Brett Godfrey, has a dilemma. He has to promote the image of Virgin as a value airline while pushing it as an upmarket carrier that appeals to the business market.

Right now he knows that while his cost base, apart from fuel, is largely under control and looks good by global comparisons, his yields are constrained because he is unable to compete at the upper end of the market with Qantas.

Qantas's budget airline, Jetstar, is eating into Virgin's market at the bottom end, but Virgin has not managed to make serious inroads into the business market where travellers are prepared to pay a premium for tickets.

There are plenty of differences between Qantas mainline and Virgin. Top of the list comes the frequent flyer program.

Regular travellers - not the leisure market - want to earn free flights. Corporate flyers reckon it's one of the perks of travelling.

They also want lounges at all major ports and they want frequent flights on the main routes.

Those who have to get to the airport every couple of weeks want all these things that make travelling easier.

Qantas has them but to date Virgin doesn't.

Godfrey has decided to bite the bullet on some of these concessions. In other words, he needs to position Virgin well ahead of Jetstar by making the airline user-friendly to regular travellers.

Over the past couple of months Virgin has introduced a policy that, for a price, means travellers who don't make their flights don't lose their tickets and can catch the next available flight.

But that's just the beginning. Virgin will now certainly be looking at introducing a frequent flyer program, one that is attached to a major bank credit card.

As Godfrey says, "Jetstar has been eating our lunch ... we have to take some of Qantas's dinner."

He's certainly right about that. The earnings before interest and tax released by Virgin yesterday for the half year to March was down 9.6 per cent. Qantas improved EBIT for the half to December by 20 per cent from its domestic mainline and Jetstar operations.

A major contributor to this was Qantas's better hedging policy for fuel costs. The other outstanding difference was Qantas's frequent flyer credit card. It's a neat profit centre.

Virgin will clearly be trying to replicate Qantas's success with a frequent flyer offer. It begs the question of why it has taken so long for Virgin to jump on board the program - the answer being that with traditional load factors at 80 per cent, why would it give away seats?

Fair enough. But thanks to the capacity overloading that both airlines have engaged in over the past couple of years, there is plenty of room for Virgin to make something of those spare seats.

That Qantas has no real competition in the rewards market has given it ample opportunity to reduce the currency of its points and reduce the ability to use them.

But will a frequent flyer program and some extra allowances be enough? It might go some way but there is more to it than that.

Aspirational flyers are like aspirational shoppers. Shoppers will choose Myer over Target if the prices are comparable. People view Qantas mainline as the business airline and Virgin as the economy airline.

This is where Godfrey will have difficulty. The pitch of his seats stacks up better than the marketing pitch.

This is all a medium-term objective. In the short term and on the cost side, Godfrey yesterday outlined a series of measures to tweak the business.

These include a better reservation system that will allow it to take feeder traffic from offshore airlines, a slightly better enterprise bargaining agreement with staff, and better scheduling.

It will all assist at the margin.

But sadly Virgin is still hostage to fuel prices and the general state of economy.

If fuel prices, which sliced $70 million from profits in the past year, fall then Virgin (and Qantas) will be major beneficiaries.

It they rise then things get worse because the airline has no hedging.

A softening in the economy will be yet another blow for the industry. Some downside can be mitigated by better cost performance, but ultimately most of Virgin's performance is now largely out of its control.
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Old May 19th, 2005, 05:00 AM   #200
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After filling the Ansett vacuum, Virgin Blue has run out of levers to pull and may settle for stability
STEPHEN BARTHOLOMEUSZ
19 May 2005
The Age

AIRLINES have lots of financial and operational leverage. For most of its history, Virgin Blue rode that leverage into the vacuum that Ansett left. Today the leverage is working against the carrier.

While the profit dip announced yesterday was in line with expectations Virgin Blue itself had downgraded, the 13.2 per cent fall was the first setback for the cheeky carrier in its relatively short but remarkably successful history.

Virgin Blue is suffering a form of growing pains. It grew, deliberately, too fast and will now have to take it easy for a while waiting for the economics of its businesses to realign themselves. Having almost doubled its capacity in the past two years to ensure it maximised its share of the post-Ansett and post-Jetstar market, the airline will add only two new planes this year and appears to have settled for its one-third of the domestic market.

The Virgin team underestimated the impact that the Jetstar launch and its own boosting capacity would have on prices, load factors and yields. Whether or not the team would do things differently if it had a chance to revisit its decisions, however, is a moot point. To maximise its long-term market position, the airline had to hold its share of a market the Jetstar launch was destined to expand, which meant increasing capacity.

The metrics of last year were straightforward. Capacity increased 40 per cent against a 27 per cent increase in the number of passengers carried and a 30 per cent increase in revenue-passenger-kilometres. Load factors were down 4.9 per cent and yield down 5.6 per cent.

Allowing capacity to blow out ahead of demand in an environment where prices were, thanks to the Jetstar launch, diving, was always going to have an adverse impact on Virgin Blue. It tried to offset that impact by focusing even harder on its already market-leading cost base. Costs per available seat kilometre (ASK) were reduced from 8.16 to 7.49 .

Where the airline was unlucky, or not sufficiently prudent, was that the soaring price of crude oil blew out fuel costs. Non-fuel costs fell from 7.44 per ASK in the first half of last year to 6.08 but those hard-won gains were offset by an increase in fuel costs per ASK from 1.28 to 1.63 .

Virgin Blue's exposure to the crude oil price is unhedged, whereas Qantas was fully hedged until last December and retains partial hedging to dampen the impact of high oil prices. That blunts Virgin Blue's ability to exploit properly its status as the low-cost airline in the domestic market.

It has not helped that airport fees are also surging, with Virgin Blue chairman Chris Corrigan telling a transport conference in Canberra yesterday that airport charges had risen between 50 per cent and 200 per cent over the past three years and CEO Brett Godfrey saying the charges now account for about 15 per cent of the airline's operating cost base.

The other restriction on its ability to compete more aggressively without sacrificing its profitability is that Virgin Blue is a high-margin airline. In the year to March it maintained its margin of earnings before interest, tax, depreciation, amortisation and aircraft rentals at a still-healthy 25 per cent (30 per cent previously). It would want to protect those margins.

During Patrick Corporation's bid for Virgin Blue this year, Corrigan - Patrick's chief executive - made it clear he did not want to get caught up in a price war with Jetstar and that capacity growth would be constrained to protect yields and margins. Yesterday Godfrey spoke of a "period of consolidation" and a focus on product and costs rather than capacity.

The continued focus on costs is Godfrey's response, not just to the sector's competitive intensity, but the leveraged economics of airlines.

Whether Qantas' Geoff Dixon and Jetstar's Alan Joyce will allow Virgin the breathing space it is seeking is another issue. Joyce, coincidentally or otherwise, chose yesterday to announce the sale of a million seats at $29, including taxes and charges, to celebrate the anniversary of Jetstar's first flights on May 25 last year. If he does not want to lose share, Godfrey will have to respond.

Dixon and Joyce are not in the business of trying to destroy Virgin Blue. They want to keep it from gaining share and limit its ability to attack Qantas' core business and government franchise. Forcing it to match heavy discounts might help achieve those objectives.

In the longer term, it would suit Corrigan and Dixon - both of whom have long experience of operating within duopolistic markets - if the three airlines engaged in civilised competition without major market share shifts to destabilise the relationships and undermine the sector's profitability. The latest Jetstar offering is probably more tactical than strategic.

With no let-up in the sector's competitive intensity, the escalating impact of rising jet fuel prices and a slowing economy, the outlook for Virgin Blue is challenging. The years of easy gains post-Ansett and the simpler challenge of attacking the higher-cost, full-service Qantas are over. Dixon's launch of Jetstar, which locked Virgin Blue into the middle ground and gave the Qantas group the ability to match Virgin Blue in price-sensitive segments, changed the game.

For a more mature Virgin Blue, having grabbed a far larger share of the market than it anticipated, the future is now about grinding out and maximising the profits from its existing share and capacity and growing incrementally rather than, as once appeared possible, destroying Qantas' domestic franchise as value-based airlines have done to incumbents offshore.
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