17-Jan-2011 10:23 AM

Qantas approached by FSCs for LCC offshoots

Jetstar CEO, Bruce Buchanan, stated the Qantas Group has gained a reputation as the "go-to partner" to capitalise on the rising middle-class and tourism boom in Asia (Australian Financial Review, 17-Jan-2011). The CEO stated the group is receiving interest from full service carriers in the region about establishing a low-cost offshoot. Mr Buchanan said Jetstar is in talks with JAL about launching a domestic JV or regional alliance, adding he sees similar opportunities to partner airlines in Macau, Hong Kong and Taiwan to establish new LCCs that could “leverage off the Jetstar brand”. Japan, where LCCs account for just 5% of domestic capacity, is a market where Mr Buchanan sees great potential.

Jetstar: “We’re getting a lot of interest from those carriers looking at their markets opening up, saying they’d love to have a dual-brand play but don’t have the expertise, and asking who’s done this successfully … There have been about 100 attempts by airlines to set up their own LCC and they’ve all failed, bar one, which is the Qantas-Jetstar example. The graveyard of low-cost carriers set up by full-service airlines is quite full.” Bruce Buchanan, CEO. Source: Australian Financial Review, 17-Jan-2011.

Jetstar: “We need to be welcomed into a market like that [Japan], we can’t just go in … There’s a lot of pre-work that needs to be done, but if there’s an opportunity for us to get into the Japanese market we’ll be there.” Bruce Buchanan. CEO. Source: Australian Financial Review, 17-Jan-2011.