Jetstar Delays Its Launch of Services to Europe
By Peter Smith, Financial Times | Jan. 24, 2008
Jetstar, the low-cost airline owned by Australia's Qantas, has been forced to postpone the start of services to Europe following delays in the delivery of Boeing's 787 Dreamliner.
Alan Joyce, Jetstar's chief executive, said the problems at Boeing would have a knock-on effect to the start of its new services of at least a few months.
Jetstar had initially hoped to begin services to Europe in early 2009. However, it now expects the timetable to slip until later that year or early 2010.
Qantas had previously said that delays to deliveries from both Boeing and Airbus were causing capacity shortages. However, the shortages have allowed the airline to increase load factors, helping to push profits to record highs.
Mr Joyce said Jetstar was in talks with Boeing about compensation.
Jetstar's warning comes as Virgin Blue, the airline part-owned by Virgin's Richard Branson, prepares to expand its services. On January 23, Virgin Blue said it was optimistic that talks between Australia and the US next month would pave the way for it to begin flights between Australia's east coast and the US west coast under its new V Australia brand.
Virgin Blue won Australian approval for the flights in July but it still needs approval from the US.
The expansion of services comes as foreign groups are attempting to break into Australia's growing domestic and international aviation markets.
International travel to and from Australia rose 4.9 per cent to 22.13 million passengers in the first half of 2007.
Tiger Airways, the Singapore-based budget airline, began services within the Australian market at the end of last year, ending a long-standing duopoly.
The budget airline market in Australia is also becoming more competitive.
Indonesia's Lion Mentari Airlines has proposed a joint venture with Australia's SkyAirWorld, the charter airline operating between Brisbane and Honiara in the Solomon Islands.