Australian carrier Impulse Airlines began low-fare operations from Sydney on 5 June, challenging the domestic domination of Ansett Australia and Qantas.

Impulse has started with seven daily Sydney-Melbourne return flights, using three new Boeing 717s leased from Pembroke Capital. The service is supported by a Sydney-Canberra shuttle service using its 19-seat Raytheon Beech 1900D turboprops, which are challenging Ansett's Kendell Airlines Saab 340s and Qantas' Bombardier Dash 8s on the route. The airline plans to begin a Sydney-Brisbane service in September, after it receives two more leased 717s. Melbourne-Brisbane will follow.

Impulse has beaten rival low-fares start-up carrier Virgin Blue into the air by upgrading its operator's certificate and turboprop slots at Sydney to the 717. Virgin Blue plans to begin operations in July, starting with a frequent Brisbane-Sydney service using Boeing 737-400s transferred from Virgin Express. This will be followed by Brisbane-Melbourne and, after the September Olympic Games, Sydney-Melbourne.

Ansett and Qantas have responded by matching Impulse's low A$139 one-way ($82) fare on the lucrative Sydney-Melbourne route, one of the busiest domestic sectors in the world. Qantas has drawn up plans to launch a competing "no-frills" operation using Boeing 737s available from its fleet, but is waiting to see how Impulse performs. "At this stage, we haven't taken a decision to start a new airline," says Qantas chief executive James Strong. Ansett says it has no plans to start a low-fares airline.

The Australian Government, meanwhile, is strongly behind the new entrants, having recently removed ownership controls to allow Virgin to start a 100% foreign-owned domestic airline.

In a move regarded as highly political, the Australian Competition and Consumer Commission announced on the day Impulse began low-fare operations that it is to investigate Ansett's and Qantas' frequent-flier programmes, citing complaints from customers. The dominant carriers' frequent-flier schemes are viewed as the major threat to the success of both new low-cost airlines.

Source: Flight International