Operators to Australia predict the onslaught of a price war among Australia’s domestic airlines following Virgin’s plans to launch low-cost domestic carrier Down Under.
Compared with Ansett’s £113 and Qantas’ £80 full published one-way fares between Sydney and Melbourne, Branson plans to offer seats for less than £40 between major cities.
Hayes and Jarvis general manager commercial Declan Morton said:”I don’t think Ansett and Qantas offer bad value for money at the moment but when anyone enters the market offering the same service for less money, you have to ask questions.
“Virgin is a strong brand and is good at marketing, so undoubtedly it will open up the market. It could do with a little more competition.”
Kuoni product manager Jayne White agrees. “It’ll certainly give Qantas and Ansett a run for their money,” she said. “If we can get lower cost flights internally then that will be fantastic.”
However, Travel 2 director David Gibbs was less convinced that the low-cost fares would effect operators in the UK.
“I think this will have more of an impact on independent travellers and Australian residents because many travellers who book through agents in the UK already benefit from special offers or discounts on internal flights in conjunction with their long-haul carrier,” said Gibbs.
“It will stimulate the market. Although I wonder how much of a threat it will be to the existing scheduled airlines. Low-cost carriers only have certain capacity and the overspill will be picked up [by Qantas and Ansett],” he said.
Virgin Australia has yet to officially announce its internal routes although it eventually hopes to fly between major cities with a population over 50,000.
Service is expected to start before the 2000 Sydney Olympic Games in September using at least five B737s.
Qantas, which has seen a fall in its share price since the announcement, said it welcomes the competition and will react vigorously meeting Virgin Australia head on.
A spokeswoman for Ansett said it was too early to comment. “Virgin has a long way to go before all the legislation is in place.”
However, sales manager Jim Corcoran drew attention to Ansett’s special backpacker fares of £46 one-way from Sydney to Melbourne.
“Our fares vary according to the holidaymakers flexibility,” he said.