NZ now on Jetstar radar

Qantas' low-cost offshoot Jetstar has named New Zealand as a potential first port of call for its international service.

The Australian airline launched Jetstar two years ago as a budget rival to Virgin Blue, which has rapidly grown across Australia and now flies the Tasman as Pacific Blue.

Jetstar chief executive Alan Joyce told the Australian Financial Review that while the immediate focus was expanding its Australian services, the airline planned to be flying international routes by early 2007.

A company spokesman said the airline was still in its formative stages, having yet to receive its full complement of 23 Airbus A320 jets.

Jetstar flies 177 passengers in each of its A320s, compared to Air New Zealand's 146 (in both business and economy class). Flying out of secondary airports and catering to the leisure market, Jetstar is similar to Air NZ's Freedom wing.

With a different brand and focus on internet sales, it tries not to "cannibalise" high-paying business passengers from the Qantas brand. Flying internationally, it could prove a tough competitor to both Pacific Blue and Air NZ.

Pacific Blue is about to expand its services, finally adding flights out of Auckland. In December it signed a deal to take over the international flights of the Samoa Government-owned carrier, Polynesian Airlines.

Air NZ, last year stymied in its attempts to form a price- and schedule-fixing arrangement with Qantas, has been talking with the Australian airline about ways of co-operating that would not anger competition authorities.

Any move by Jetstar on the Tasman could be a sign that Qantas has put the friendship talks on hold and is prepared to compete vigorously against Air NZ.

Supporting its claim for an alliance, Air NZ initially said Qantas could destroy it in a war of attrition.