Business class gets cheaper
By Steve Creedy
13-09-2005
From: The Australian
http://finance.news.com.au/story/pri...580688,00.html
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"THE battle for domestic business travellers is hotting up with Qantas (qan.ASX:Quote,News) introducing new discount fares aimed at luring passengers to the front of the plane during off-peak periods. News of the Qantas "D-class" business fares emerged as Ozjet confirmed it would operate eight return flights each business day between Brisbane and Melbourne when it started flying later this year.
Virgin Blue (vba.ASX:Quote,News) is also ramping up its efforts to lure corporate customers with new technology that allows travel agents and big accounts to link directly into its reservations system.
The Qantas discount business fares are being tested on several routes and mirror a strategy adopted by the airline on its international routes.
Qantas normally sells a Melbourne-Sydney business class fares for $576 and a full economy ticket for $373.
The new fare will sell for $411 - less than $40 above full economy - for flights during the middle of the day, when business travel demand is at its lowest ebb.
Routes taking part in the trial are Sydney-Melbourne, Sydney-Brisbane, Adelaide-Melbourne, Adelaide-Canberra, Sydney-Canberra, Melbourne-Canberra, Melbourne-Hobart and Sydney-Hobart.
"We've selected a cross-section of business routes to trial it," said Qantas executive general manager John Borghetti.
"The intention is to, firstly, stimulate demand in the off-peak period and, secondly, to stimulate some upsell from economy.
"The other issue here, of course, is that as we've grown and upgraded our fleet - the off-peak business class services have more seats."
Mr Borghetti said Qantas was optimistic the small price gap between full economy and the new fares would prove attractive to business travellers.
Asked whether moves by Virgin Blue and Ozjet on the business travel market had influenced the decision to introduce the new fares, Mr Borghetti said: "We're busy trying to run our own airline."
Ozjet management remains optimistic it can start selling tickets by the middle of next month for a launch in late October or early November.
The airline plans to initially operate 94 flights a week on the Sydney-Melbourne run and wants to add Melbourne-Adelaide from the first week of February with Canberra and Brisbane next on its radar.
"Basically from the middle of January, we'll have one plane a month arriving," chief executive Hans van Pelt said.
Mr van Pelt said the decision of Ozjet owner Paul Stoddart to sell his Minardi Formula One racing team was unlikely to have any immediate effect on the airline.
The Minardi boss sold the team to Red Bull for a rumoured $US35 million ($45 million) but Mr van Pelt said the money to launch Ozjet was already in place.
"Certainly Paul's got a good return and, I guess, down the track we could certainly use it for something, but that's up to him," he said."
Good news for some
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