Qantas launches budget carrier Australian Airlines

Qantas Airways Ltd launched its new international budget carrier Australian Airlines today, with an inaugural flight between Cairns to Nagoya in Japan.

The airline plans to offer cheap flights between Cairns and six Asian destinations - Nagoya, Fukuoka and Osaka in Japan; Hong Kong; Singapore; and Taipei.

Tickets are expected to be 25-30% cheaper than those offered by Qantas.

"It's not every day that you can create a new airline. We have a unique opportunity here," Australian Airlines chief executive Denis Adams said.

The airline has plans to expand operations to another Australian city, possibly Sydney, and its number of Asian destinations by late 2003.

The Australian Tourist Commission (ATC) said the new airline would provide the industry with a welcome boost and help it achieve its goal of delivering one million Japanese visitors to Australia by 2010.

"Australian Airlines is good news for Australia and presents enormous opportunities for inbound tourism," said ATC managing director Ken Boundy.

"Airline capacity from some of these destinations has presented challenges for Australian tourism in the past and the launch of Australian Airlines is a step in the right direction in addressing this issue."

The launch came as Singapore Airlines (SIA) chief executive officer Cheong Choong Kong announced he would not allow short-term considerations to influence the company's long-awaited decision whether to move into Australia's domestic aviation market, nor would SIA be rushed into a hasty decision.

"We are keeping our options open, we are looking at the numbers, we are trying very hard not to let anybody push us into any target date or a schedule." Cheong told Australian Associated Press.

SIA has not had a domestic presence in Australia since Ansett, its former partner in the Star Alliance network of airlines, collapsed last year.