Qantas launches new tourism airline


The new airline will link from Cairns directly with tourist destinations such as Uluru (Ayers Rock) and the Gold Coast

By Grant Holloway
CNN

SYDNEY, Australia (CNN) -- Australia's largest airline, Qantas Airways, is to spin off a cut-price international operation aimed squarely at Asian tourist markets.

Called Australian Airlines, the service will operate out of the northern vacation destination of Cairns and fly directly to six Asian cities: Hong Kong, Taipei, Singapore, Osaka, Nagoya and Fukoka.

The airline will also offer connecting flights between Cairns and other tourist hotspots in Australia such as the Gold Coast in Queensland, and Uluru (Ayers Rock).

It eventually plans to run a fleet of 12 planes and offer services to all Australian mainland capitals.

The new, independently run airline, will use Boeing 767-300s, configured totally as economy class, on all the routes, Qantas said Tuesday.

Australian Airlines will not compete head-to-head with Qantas on any of the targeted routes, all of which have been flown previously, and unsuccessfully, by Qantas.

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The airline is scheduled to start flying in the third quarter of next year pending final approval of a cost structure from Qantas chief executive Geoff Dixon and satisfactory agreements with airline unions on wages and conditions.

"Provided these are concluded satisfactorily, we will be in a position to commence flying around September next year," Australian Airlines chief executive Denis Adams said in a statement to the Australian Stock Exchange.

"The simplicity of the Australian Airlines model enables us to save significant costs compared to more traditional airlines," he said.

Adams said the airline would boost inbound tourism to Australia and provide international growth for Qantas.

Australia's tourism industry, like most others around the world, has been bleeding following the terror attacks on New York and Washington in September.

"Our job will be to create profitable flying on routes Qantas has withdrawn from or on routes where Qantas has been unable to extract a satisfactory return," Adams said.

Qantas is one of the ten largest airlines globally and one of the few to be operating profitably in the post-September 11 climate, largely due to the recent collapse of its main domestic opposition, Ansett Airlines.

Qantas shares were trading 1 percent, A4c, lower at Aust.$3.96 shortly after midday on the Australian Stock Exchange Tuesday.