New Low Cost Airline for Asia
SINGAPORE, 06 April 2004
Qantas said today it would be the major investor in a new intra-Asia, low cost airline based in Singapore. The Chief Executive Officer of Qantas, Geoff Dixon, said the airline would fly to a range of Asian cities within five hours of Singapore and operate a fleet of single aisle aircraft - either Boeing 737-800s or Airbus A320s.
He said that Qantas did not currently fly on any of the new airline's preferred routes.
Mr Dixon said the airline would begin flying before the end of 2004 with four aircraft and build to a fleet of more than 20 aircraft over the following three years.
He said Qantas would own 49.9 per cent of the new airline, with 21.1 per cent owned by Mr Tony Chew and 10 per cent owned by Mr FF Wong, both prominent Singaporean businessmen. Temasek Holdings (Private) Limited, a major investment company based in Singapore, will own the remaining 19 per cent.
The owners will invest a total of S$100 million in the new airline, with Qantas contributing S$50 million. All aircraft will be financed through operating leases.
"This is a modest investment for Qantas but it is an excellent opportunity to participate in the growing intra-Asia travel market," Mr Dixon said.
"The region, which has a population of more than 3 billion people, is enjoying strong economic growth and features many potential destinations for point-to-point travel from Singapore.
"Qantas has had considerable experience competing against low cost carriers in the Australian market over the past ten years and, more recently, Qantas set up its own low cost airline - Jetstar - which is taking bookings and will commence flying in Australia next month.
"A team from Qantas has been working on this project for the past nine months. The team, headed by Mr Con Korfiatis, a senior executive at Qantas, includes former executives of successful European low cost airlines.
"The team, plus people to be recruited throughout Asia in coming months, will open offices in Singapore and be responsible for bringing the airline on line.
"Our aim with the new airline is to stimulate this market, as other low cost carriers have done in other parts of the world.
"We do not aim and do not expect to be a threat to the major established airlines in the region."
Mr Dixon said Qantas had been flying to Singapore for 69 years and Changi Airport was Qantas' largest international hub.
"It is a very strong base for the airline and we have excellent local partners in Mr Chew, Mr Wong and Temasek," Mr Dixon said.
Mr Chew said: "I believe in the growth of budget air travel in Asia. Together with our partners, Qantas and Temasek, we have the right combination of financial backing, market knowledge, and airline experience.
"The new low cost carrier will deliver quality, value and safety to the traveller."
The launch of the new airline is dependent on it obtaining a Singapore Air Operators' Certificate and substantive traffic rights.
Mr Dixon said the new airline would further grow the Qantas flying product, which comprised:
* Qantas International, offering about 540 flights each week serving 84 destinations in 35 countries;
* Australian Airlines, the full service international leisure carrier, which operates more than 50 flights each week to 12 destinations in six countries;
* Qantas Domestic, offering about 2,500 flights each week;
* Jetstar, the domestic low cost carrier that will start flying on 25 May; and
* QantasLink, the regional airline, offering more than 1,900 flights each week.
Issued by Qantas Corporate Communication (3071)