Rejuvenated Ansett sparks price war

The imminent arrival of a revamped Ansett looks set to spark a price war in Australia as Virgin Blue and Qantas launched cheap airfare deals for early in the new year.

Virgin Blue announced 10,000 seats priced at a low A$5 ($NZ6), leaving Qantas to respond with 2.5 million summer seats priced from $A66, one way, for post Christmas travel.

Virgin's internet only offer is expected to sell out today, just 48 hours after the special was launched. It applies to mid-week flights out of Melbourne between January 9 and March 27.

Spokesman for Virgin Blue, David Huttner, said online demand had frozen the airline's website on several occasions yesterday.

The timing of both the Virgin Blue and Qantas deals appears to be in anticipation of the take over of Ansett by the Fox-Lew syndicate Tesna Pty Ltd early in February

Huttner denied that the $A5 fares were aimed at Ansett or that the airline was hurting Virgin Blue's back pocket.

"Our fares are aimed at establishing that we are the low airfare operator in Australia. We are saying thank you to people and we don't want those planes to fly empty when there's a few extra seats available," he said, adding that the impact of Ansett was extremely minimal.

Virgin Blue has hinted that more super specials are in the pipeline.

Meanwhile, 4000 successful job applicants to the revamped Ansett were notified by mail yesterday, while another 400 joined the thousands of other redundant Ansett employees looking for payouts.

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