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Jetstar better positioned than other LCCs: CEO

1-Jun-2010 10:42 AM

Jetstar CEO, Bruce Buchanan, stated the carrier is better positioned than other LCCs to handle weakening domestic leisure demand and has no plans to reduce or redeploy aircraft (The Australian, 01-May-2010). However, Mr Buchanan admitted there could be adjustments to the mix of growth at Jetstar and Qantas as the environment changes. One third of Jetstar’s business now comes from the domestic market. The CEO also questioned whether there was room in the Australian market for three unaligned carriers, stating the market appears to cope with two carriers but became unstable when a third joined and capacity was not added rationally.

Jetstar: “We're competing at the leisure end of the market so when domestic yields go down we definitely feel it. But we've been through this many times and we're just better positioned than the other two [Virgin Blue and Tiger Airways]. If you did the calculations at the half-year mark you can work out what our margin difference is between Virgin and Tiger and we've got a substantial headroom above both of them. So when yields decline it gives us a lot more room before we wind up in the same hot water they do. And if we end up in hot water, then they end up in even more hot water,” Bruce Buchanan, CEO. Source: The Australian, 01-May-2010.