Interview with OzJet’s Paul Stoddart

OzJet Chairman Paul Stoddart this morning gave a wide ranging interview to the Australian travel trade from England, where he is finalising the sale of his Minardi F1 business.

He gave his views on the launch of his new business class airline and his plans for the future. 

First flights will commence on Tuesday 29^th November with fares at $650 for a return Syd –Mel flight, compared to $740 for the corresponding fully flexible QF flight. A new website also went live this morning at www.ozjet.com.au with ticket sales available on-line.  

Mr Stoddart was clearly excited about the future of his fledgling airline and stated he will be in Australia for the inaugural flight. He discounted concerns about the age of his fleet claiming all the aircraft were from his European aviation business and had been given a complete “back to birth” check, and were in pristine condition. 

He also refuted claims that rising fuel prices could put his pricing strategy at risk. “ We own all our aircraft and therefore, do not have any debt or lease payments to contend with” he said, He did however, admit that he would look at a fuel hedging position in the future and that fuel surcharges were unfortunately  “a way of life in the aviation business” and they would react if necessary. 

Discounting the idea of a price war with Qantas and Virgin Blue, he maintained that the industry was run by sensible people and in particular, cited a close relationship with Geoff Dixon forged during the Grand Prix days. He also re-iterated the point that that their aspirations were relatively modest, targeting only single digit market share. He also said the while the competitors may be able to match his fares, they couldn’t match his product. 

His target market was the disenfranchised Ansett traveller and the full fare economy ticket purchaser. He claims not to be after the Qantas Club member although he did admit that they would be targeting key Corporate accounts and the public sector. As this puts them head on with Qantas, expect a flurry of activity amongst the Qf account managers and the large corporate agents such as Amex, BTI and TQ3. 

On the question of commissions, OzJet will pay agents 5% with a number of override agreements under negotiation with the major chains. He expects that up to 50% of sales will come through the agent community. OzJet Corporate Affairs spokesman Geoff Harris, when asked about rival Jetstar’s plans to use Australia Post outlets, stated that it was not on the OzJet agenda citing agents, the website and call centre as sufficient access for their customer base.

Asked about expansion plans, particularly across the Tasman, Mr Stoddart said their only goal was to consolidate the Australian business, suggesting that perhaps a competitor would see an opportunity to replicate their model internationally if they proved successful. 

The key differentiators for the product? Business class room and comfort, increased carry on baggage limits, simplified check-in and, most importantly, speed off the plane. With only 60 passengers to clear, business travellers will be in and out of the airport quicker than ever before. Lounges will be brought on line over the next six months although a loyalty scheme was seen as 6-12 months away at least. 

We should expect a large F1 flavour to the marketing push with former iconic commentator Murray Walker to be the voice of the campaign, Travellers will have the opportunity to win seats in the former Minardi F1 dual seat cars with one a day given away in the first month and one a month thereafter. Mr Stoddart said he had received a huge groundswell of support already from motor racing enthusiasts in Australia and expected to attract many of them to the product. 

Finally he thanked all his staff who he said, had worked tirelessly to bring them to this point and he looked forward returning to Australia and focusing his attention 100% on OzJet. He expects November 29 to be “a very moving day”. 

The Mole