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Australia's newest budget airline takes off with champagne

Passengers on the first flight of Qantas Airlines' no-frills subsidiary Jetstar got first-class treatment yesterday, with free champagne on board and cappuccinos, mini-quiches and chocolate desserts at their destination.

Passengers paid as little as A$54 (US$35) -- about one-sixth the regular airline fare -- for the 90-minute flight from Newcastle, north of Sydney, to Melbourne's Tullamarine airport. That fare is less than the taxi ride that some passengers would have paid to drive from the airport to downtown Melbourne.

The first-class treatment won't last long.

Jetstar -- set up to compete with British tycoon Richard Branson's cut-rate domestic carrier Virgin Blue -- will offer unreserved seating, food only if purchased, smaller than normal seats and reduced spaces between rows.

Jetstar chief executive Alan Joyce, who was on hand at Tullamarine when the maiden flight arrived, said 86 flights were planned for yesterday to 13 destinations around Australia.

Jetstar will fly mainly between Australia's three biggest cities -- Sydney, Melbourne and Brisbane. However, it plans to expand its network progressively from November, adding flights to more remote cities and tourist locations such as Perth, Alice Springs, Ayers Rock, Darwin, Broome, Townsville and Adelaide.

The budget carrier's launch comes amid a growing challenge from Branson's Virgin Blue, which has carved out a 30 percent share of Australia's domestic aviation market since its launch in 2000.

Qantas head Geoff Dixon said he expected Jetstar to capture about 20 percent of the domestic market over the next two years -- most of it from Qantas.

"I think Virgin will certainly still stay around about 30 to 35 percent and I think Qantas itself will probably end up with about 45 to 50 percent," Dixon said.

The champagne and other treats were only for passengers on Jetstar's first flight. After that, the airline expects the simple things to keep customers coming back.

"It worked out very well for me -- I like jumping on early so I got a good seat at the front," said Jess Duus, a 20-year-old Melbourne university student.
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