It is only a question of time, analysts say, before Qantas folds Australian Airlines into its planned new long-haul, low-cost arm Jetstar International. Both target overseas routes where margins are too low for Qantas.

The market is taking its cue on Australian’s future from the recent Qantas reshuffle that creates only two airline groups – Qantas and Jetstar. Geoff Dixon, Qantas chief executive, also says Jetstar will fly some of the new Boeing 787s Qantas has ordered. He confirms that none of the aircraft on order are earmarked for Australian, which prompts insiders to predict that it will last no longer than its current fleet of five 767s. They expect a gradual transfer of Australian routes to Jetstar as the latter expands its fleet.

Peter Harbison, chair of the Centre for Asia Pacific Aviation, claims Qantas would be better off without Australian, the worst-performing of its six brands. Comparing it to Jetstar, he says “it is very hard to see why Qantas would continue with both models”. ■

Source: Airline Business