Qantas will close its Australian Airlines leisure carrier in July and its services will be taken over by Qantas and Jetstar as part of the group’s two-brand strategy.

The closure of Australian Airlines, which has recently been unprofitable, was not unexpected following Qantas’s move earlier this year to a two-brand strategy focusing on the mainline carrier and low-cost Jetstar.

The move was also necessitated by Jetstar’s expansion into international operations, with the low-cost carrier initially to serve six destinations – Bangkok, Phuket, Osaka, Ho Chi Minh City, Bali and Honolulu – from November, subject to regulatory approval. Expansion to Europe will follow.

Australian Airlines was launched as an all-economy leisure airline in October 2002 to operate on routes not profitably viable for the mainline carrier. The airline failed to reach expectations, however, with Qantas chief executive Geoff Dixon conceding it “didn’t work out the way we would have liked”.

Australian Airlines’ aircraft and crew will continue to operate from the Cairns base under the Qantas brand, with 49 return flights a week to be operated from the Queensland airport. Some 370 positions will remain in Cairns, but 40 cabin crew will lose their jobs.

Following Australian’s closure, Jetstar will add services to Osaka, with daily Sydney-Osaka and Osaka-Brisbane-Sydney services. Honolulu services will rise to eight weekly, with Jetstar operating three a week from Sydney and two from Melbourne, and Qantas flying three times weekly from Sydney. Qantas will take over Australian’s Singapore services, operating them via Darwin instead of Cairns.


Source: Flight International