Qantas Announces it is Scrapping its Budget Carrier Australian Airlines

Dixon said Qantas did not foresee any major drop in the price of oil in the next two or three years so the airline would have to substantially restructure.


SYDNEY, Australia_Qantas Airways Ltd is scrapping its budget carrier Australian Airlines in July, but the flights will be taken over by regular Qantas planes, chief executive Geoff Dixon announced Tuesday.

"From a customer perspective, these flights will be like all other Qantas international services. They will have Qantas flight numbers, aircraft will be branded in Qantas livery and crew in Qantas uniforms will provide Qantas in-flight product," Dixon said in a statement.

"Australian Airlines has done an outstanding job over the past few years, but we are determined to take full advantage of Jetstar's success, with its highly competitive cost structure and service standards," he added.

Jetstar is Qantas' second budget offshoot and the company wants it to operate as its only low-cost carrier.

From November, Jetstar will begin flying international routes to Bangkok and Phuket in Thailand, Osaka in Japan, Vietnam's Ho Chi Minh City, the Indonesian vacation island of Bali and Honolulu.

Dixon said Australian Airlines began flying when SARS, or severe acute respiratory syndrome, took hold in the region in 2003 and the airline never recovered from the associated downturn in international travel. There were 8,000 cases of the disease in 30 countries, about 800 of them fatal.

"We would have liked it to be more profitable," Dixon told reporters.

He said 30-to-40 people would lose their jobs in the next few months with the loss of the airline while another 550 people would be recruited to staff the new Qantas and Jetstar services.

Dixon said Qantas did not foresee any major drop in the price of oil in the next two or three years so the airline would have to substantially restructure.

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