Skift Take
JetStar is a success story for the Qantas group; one that other airlines will want to review closely. But it also benefits from a unique market which has seen significant passenger growth, and where long-distance flight is the best available—or only option—to get from point A to point B.
It's one of the basic facts of aviation that flagship carriers don't do low-cost models well.
Many full-service airlines have tried, and many have failed, but Qantas' CEO, Alan Joyce, believes that he's found the formula for success. It starts, he says with disrupting yourself before anyone else has the chance to do it for you.
"At Qantas, a good few number of years ago, we decided to be a disruptive airline, not sit back and let it happen," he said in his address to attendees at the CAPA Summit in Helsinki. "There's a few things that we've done to be able to focus on coping with that environment and taking advantage of those opportunities. The first thing was to take advantage and fix the basics of where we had a problem. We had a problem with our cost base. Our cost base was too high, compared to our Asian peers."
"Our cost base too high compared to our domestic competition. The transformation program that we've implemented has been about addressing those disadvantages and we're making massive progress. Some of our analysts say that Qantas' cost base will be equal to Singapore and Cathay's by the end of the transformation. And it will be within 5% of our major domestic competitor."
Supporting improvements at the flagship carrier is the lean low-cost airline JetStar, which Joyce says, "Has a massive cost-base a
