Qantas has told its low-cost offshoot to look for expansion opportunities that will require boosting its fleet beyond the 23 177-seat A320s it will have by June.

Jetstar spokesman Simon Westaway yesterday said 2006-07 would be a year of consolidation for Australian and New Zealand operations, but Jetstar had been asked to explore "the next tranche of growth on the Australasian market - and we will look at doing that," he said.

"We are actually exploring what options there could be for an A319 or A321, as well as the obvious options we have on additional A320s, if the market demands, and if the performance of existing markets holds up well."

Mr Westaway said the airline was also looking at one or two new destinations, as it brought in the rest of the A320s in the first half of this calendar year.

The comments came as Jetstar announced it would attempt to lure more business passengers to Avalon airport, near Geelong in Victoria, with early-morning flights to Sydney.

The low-cost Qantas offshoot will use an aircraft based at Avalon to launch a 6am flight from March 26. It hopes to appeal to businessmen in Western Melbourne and nearby Geelong.

The airline's first Sydney-bound flight had been leaving at 8am.

"What we think this will do is really develop the commercial and business use of Avalon - even more than before," Mr Westaway said.

"We estimate that about one in five customers using Avalon are doing it for commercial reasons, but we're working very hard to get the awareness up."

The Avalon-Sydney aircraft will also start flights from Avalon to Perth on March 28. Because of its presence, Jetstar will set up the crew base at the secondary airport.

Jetstar has almost doubled its flights, and tripled seat availability to Avalon, since it began operations there in June 2004, prompting owners Linfox Airports to upgrade the facilities.

"We're pretty confident that with the introduction of the Perth service and ... the overnighting of the A320, it really allows us to put in the right style of schedule and start to get a number of markets into and out of Avalon," Mr Westaway said.

In a separate development, Qantas has again upset well-heeled travellers to Hamilton Island by announcing it will axe its service to the resort later this month.

The airline reinstated the service after complaints by residents and tourism operators about the lack of an alternative to Jetstar, but it now says the route was not profitable.