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Ansett on standby for Virgin Blue onslaught

By Phil Boeyen, ShareChat Business News Editor

Thursday 20th July 2000

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Ansett Australia is taking a bet both ways on how it will react to pricing from newcomer Virgin Blue.

The Air New Zealand-owned Ansett says it will be "matching price initiatives but not competing on cheap prices" when Virgin Blue takes to the skies in the next few weeks.

At its launch earlier this month Virgin Blue announced special A$99 one-way fares between its Brisbane hub and Sydney.

And while it has not announced its long-term fare structure, it has promised it will stick to an original pledge to bring lower fares to the Aussie air travel market.

Virgin Blue will initially operate 7 daily return services between Brisbane and Sydney, with first flights due to take-off on August 3rd, and Brisbane-Melbourne flights to follow soon after,

Ansett Australia says it will be keeping a close eye on the new airline and its products.

Spokesman Peter Young says his airline is very experienced at selling cheap fares, and has an advertising team which is able to respond quickly to competition initiatives.

But he says Ansett is more interested in competing on value, and has been undertaking a brand repositioning aimed at more lucrative customers such as high frequency business travellers.

Mr Young also says that while Virgin Blue is a competitive concern, it is Qantas that continues to be the more serious issue for his airline.

He says Qantas has such a powerful brand within Australia that the new alliance with Air New Zealand was in many ways critical to Ansett's survival.

Singapore Airlines, which is increasing its stake in Air New Zealand to 25%, also has a 49% interest in Virgin Atlantic, which is Virgin Blue's parent company.

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