Air Transport World

Jetting to the top.(PROFILE)(Jetstar International)(Qantas Airways Limited)

Perhaps it is Irish CEO Alan Joyce's infectious enthusiasm, or maybe it is parent company Qantas's determination to succeed. Or it might be the Australian passion for travel regardless of adversity, or simply a robust domestic economy. Whatever the explanation, Jetstar is soaring, posting a pre-tax profit of A$87.4 million ($74.2 million) for the year ended June 30, an increase of A$75.1 million on the previous year. The result was net of A$28 million in startup costs for Jetstar International. Qantas Group does not publish detailed results for subsidiaries but did state in its 2007 annual report that Jetstar's revenue had passed the A$1 billion mark.

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The carrier's origins date back to October 2003 when Qantas announced formation of the 100%-owned subsidiary to counter the rise of Brisbane-based Virgin Blue. The move was forced on QF because its many legacy union contracts stifled the restructuring required to compete more effectively with its lower-cost rival, which was expanding rapidly in the domestic market.

Jetstar started services on May 25, 2004, using a fleet of 14 125-seat 717s that QF acquired when it took over the former Impulse Airlines in 2000. To reduce the yield impact on the mainline on key domestic routes, Jetstar operates many services from Avalon Airport, a regional field 34 mi. southwest of downtown Melbourne. The 717s were an interim strategy, with an order placed for 23 177-seat A320s.

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Unlike Virgin Blue, which aimed to fill the void left by the demise of Ansett Australia (a full-service legacy carrier), Jetstar was positioned to tap into the leisure market and routes focused initially on linking capital cities with leisure destinations. As the LCC grew, the emphasis shifted to linking major population centers in the nation of 21 million.

And growth has been impressive. In its first year to June 30, 2005, it carried 315,000 passengers over 277 million RPKs at a load factor of 72.3%. By June 2006 those numbers had leapt to 5. …

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