Aussie Domestic Flights To Fly International

2005-12-08 

Two Australian-based cut price airlines, Virgin Blue and Jetstar, will soon fly beyond Australia, as demand for overseas air travel grows faster than that for domestic flights.

Jetstar's parent, Qantas Airways, has approved for Jetstar to fly to Asian cities within 10 hours from Australia by 2007, eventually extending the routes to Europe. And yesterday, Virgin Blue's billionaire founder, Richard Branson, said he wants the airline to fly to the USA and Japan.

The plans by Jetstar and Richard Branson pit their dirt cheap discount fares against full-price air tickets sold by Qantas, Australia's national airline. Both Jetstar and Virgin Blue are planning to expand because two years of record oil prices and tough airfare competition have mauled their profit margins badly.

"It's a move that will grow the market" of international travelers, says Sean Fenton, who manages the value of $750 million at Jenkins Investment Management Pty. in Sydney. "If you can offer a lower-priced product then it's going to start to meet demand. There's always different price points that will get the market moving.''

The number of international passengers flying from Australia rose 12 percent to 20 million trips in the financial year ended June 30, from 18 million a year ago, according to Australia's Bureau of Transport and Regional Economics. That's faster than the growth of domestic travelers, which rose 11 percent in the same period, bolstered by the first full-year inclusion of Jetstar.