Braving a market dominated by Qantas and Virgin Blue, OzJet is about to become Australia’s third scheduled jet operator.

The Melbourne-based start-up plans to launch flights in the busy Sydney-Melbourne corridor during November. Its starting date has slid some, but Australia’s Civil Aviation Safety Authority says OzJet is now “on track” to receive its operator’s certificate.


The new airline is the brainchild of Paul Stoddart, an Australian expatriate best known for his racing car business. He owns Italy’s Minardi Formula One racing team as well as European Aviation Group, an aircraft charter, engineering and airline support business in the UK.

Stoddart first revealed plans to launch an Australian airline in late 2003. He proposed a low-cost BAe 146 operation that would avoid head-on competition with Qantas and Virgin Blue by using such secondary airports as Bankstown in Sydney’s suburbs. But the Qantas announcement that it would launch its own low-cost operation in the form of JetStar and the flak Stoddart faced over his secondary airports idea convinced him to rethink his plans.

He watched the Australian market for another year and announced in February a revised OzJet that would operate Boeing 737-200s and BAe 146s in all-business class configuration. Originally OzJet was to be based in Adelaide, but moved headquarters to Melbourne in August after a dispute over financial support. Hans van Pelt left Rex to become OzJet’s chief executive.

OzJet will start with at least three 737s, all transferred from Stoddart’s UK unit, with an ultimate fleet of 10-12 aircraft. Its initial schedule calls for eight Sydney-Melbourne flights each business day, with other cities added as more 737s arrive.

BAe 146 plans are less precise; van Pelt says he may consider using them on smaller routes.

Fares will be the same as fully flexible economy. With only 60 seats per jet, inflight meals, and liberal carry-on rules, OzJet is targeting point-to-point business travellers. Van Pelt admits OzJet’s aircraft will be older, but they are owned outright with no debt.

With break-even loads around 50%, van Pelt predicts that OzJet can be profitable with only a single-digit market share. Neither incumbent will admit OzJet poses any threat, but Qantas has announced off-peak discounts on business fares in select markets, including Sydney-Melbourne.

OzJet is part of a nascent move toward all-business class airlines that includes Geneva-based Privatair, which plans to operate flights for KLM, and already does so for Lufthansa and Swiss, and two US start-ups, Eos and Maxjet, which are about to launch New York-London services.


Source: Airline Business