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AllFlying |
Ozjet:
The little airline that could (it hopes) Nov
2005
 Profit
downgrades, soaring fuel prices, bankruptcies and a jittery terrorism-conscious
public have seen the global airline industry's fortunes plummet over the last
few years. So why does upstart Australian airline Ozjet - founded by Melbourne-born
aviation and motor sport mogul Paul Stoddart - believe it can make it in such
a tough environment? Michael Lallo investigates...
Not Happy
"I
don't want to say who the airline was, but there were a lot of grumpy and dissatisfied
people," Ozjet's Geoff Harris tells AllFlying.com of the Gold Coast
to Melbourne economy class flight he has just stepped off. "A lot of people were
complaining."
This, Harris believes, is why Australia's new business class
airline Ozjet - set to take to the skies in November with eight daily return Sydney-Melbourne
flights - will succeed.
He spells out exactly how an Ozjet flight will differ
from the cattle-yard experience offered by other domestic carriers.
"You'll
arrive at Melbourne airport and park in the old Ansett valet parking area, right
next to the departure gate. Three pieces of on-board luggage are allowed, so you
probably won't have to check your bags in. Inside, you'll discover 60 Jason recliner-style
seats, as opposed to the 120 seats on similar planes run by other airlines. There'll
be enough room to read a broadsheet paper and enjoy the hot meal," he says.
And the roomy cabin is also "more amenable to conversation and networking with
fellow travellers", Harris adds, presumably because one is not forced to hook
their knees around their ears and jostle for armrests, while attempting to eat
the ever-diminishing morsels of food other airlines optimistically describe as
"meals".
Just don't expect to see nubile young hostesses in skimpy attire
cavorting up and down the aisles, a la Virgin Blue. "That's not our policy," says
Harris of the recent Anti-Discrimination Tribunal finding that Virgin had discriminated
against older job applicants.
"We're
a minnow"
 While
Qantas and Virgin both provide business class services, Ozjet insists it will
lure some of their customers through its "economy class prices".
But no one
- not least Ozjet - expects it to become a major player in the industry.
For a start, Qantas and Virgin Blue offer each offer more than triple Ozjet's
number of Sydney to Melbourne daily return flights.
And while Ozjet is planning
to launch services to Queensland, South Australia and Canberra early next year,
its competitors already fly to dozens destinations around the country.
"We're
looking at a two per cent market share," Harris says, dismissing previous reports
the company is aiming for a 10 per cent slice of the pie. "We're a minnow."
Ozjet's strategy is simple: Get business travellers in the habit of checking if
an Ozjet flight is available when they're planning to fly. If so, the discount
fares and sumptuous cabins should be enough to win them over.
Most aviation
and business analysts say Ozjet can become a viable operation if it focuses on
its niche target market.
James Pherous, manager of independent travel agency
Corporate Travel Management, told ABC Radio, "I think there's a market for it,
particularly because they apparently are going to be priced at 50 per cent below
Qantas's business class level."
"[But] a discerning traveller who flies a
lot needs flexibility and changes. If they've only got a few planes ... that's
going to be difficult for people."
Virgin Blue's Amanda Bolger agrees, albeit
after wheeling out the standard PR line about how great competition is and the
obligatory welcome sentiments to its new competitor.
"We've got a proven
product, we offer frequent flights, and customers appreciate our affordable fares,"
she tells AllFlying.com . "And they can buy extra legroom for only $30."
But what about the hot meals Ozjet is offering?
"I mean, we're talking
about a flight of less than an hour," she scoffs. "And customers can still buy
food on our flights."
While Bolger declined to give specific figures, she
did admit that Virgin Blue provides exclusive air travel services to only a "minority"
of its business clientele.
The extent of similar arrangements between Qantas
and its corporate customers, on the other hand, is a closely-guarded secret.
The aviation behemoth refused to be interviewed for this story, other than to
issue a terse statement reading: "We don't comment on the activities of our competitors,
nor our response to their activities."
Nonetheless, Harris isn't worried
about too many businesses being locked into a contract with competing airlines.
"I can't imagine such deals compel them to travel with Qantas or Virgin," he says.
Third
time lucky
Exactly
when travellers will be able to fly with Ozjet, however, has been the subject
of much speculation. Press reports about the twice-postponed launch date and the
sudden move of its corporate headquarters from Adelaide to Melbourne have left
Ozjet in the embarrassing position of having everything up in the air apart from
its planes.
Harris insists that although unexpected delays in gaining the
mandatory Air Operators Certificate forced the maiden flight to be pushed back
from September to October to November, overall the whole process has run smoothly.
"It takes a minimum of three months to get the certificate, but no one has
ever gotten it in three months," he says. "If we get it in five months, it could
be a record."
As for the shock announcement that Ozjet would set up its headquarters
in Melbourne, rather than in Adelaide as planned, Harris points the finger at
the South Australian government.
Initially, he says, the government indicated
it would offer direct financial incentives to the company to establish itself
in Adelaide. But the closure of the Mitsubishi plant, among other factors, saw
the government offer a watered-down suggestion to simply apply for a federal grant.
"The ground rules changed two, three, four times," Harris says. "The formal
part of the AOC process was in train, which required us to know where we were
going to set up. We needed to make a call."
Despite the hiccups, Harris remains
upbeat about the Ozjet's prospects.
"As I said earlier, there are a lot of
grumpy and dissatisfied people out there. There's definitely a niche to be filled."
Who
is Paul Stoddart?
 He's
a chain-smoking, self-made millionaire mogul from Melbourne famous for his European
motor sport and aviation ventures. And as the founder of Ozjet, he's about to
become a household name. Michael Lallo asks: Is Paul Stoddart Australia's
answer to Richard Branson?
"He's just a typical Aussie Battler, a guy
from Coburg who discovered a love of aviation and motor sport," says Ozjet's Geoff
Harris of his boss, Paul Stoddart.
It's not the first time the Battler tag
has attached itself to Stoddart. But for someone with such a high profile in the
flashy arenas of motor sport and aviation, precious little is actually known about
the man beyond his business ventures.
Certainly, the well-worn rags-to-riches
tale has been trotted out many times: Working class Melbourne boy stumbles upon
an opportunity to buy a fleet of aircraft from the Royal Australian Air Force.
After ditching his plans to sell the planes at a profit when no serious buyers
materialise, he sets up a charter service to shuttle casino-lovers to and from
Tasmania - at the time, the only Australian state with legalised gambling. He
then moves to England, where he sets up VIP charter service European Aviation.
The windfall profits allow him to buy the Minardi Formula One racing team, which
he recently sold to Red Bull.
And of course, there's his latest venture -
establishing business-class airline Ozjet, Australia's fourth domestic carrier.
The similarities to British tycoon Richard Branson are obvious, but don't
expect Stoddart to start descending from the sky in hot air balloons or frolicking
with swimsuit models on a private island.
"Paul doesn't see himself as silver
screen or billboard material the way Branson does," says Harris. "But he is the
face of Ozjet, so his profile will increase."
He adds a caveat: "But I think
there is a perception that Ozjet is going to be much bigger than it's going to
be. It's actually miniscule."
What sets Stoddart apart from other propeller-heads,
Harris believes, is his fortitude, due in no small part to his Australian upbringing.
"He's come a long way from his school in the shadows of the bluestone Pentridge
Prison," he marvels.
"And he's run a motor company and come out in one piece.
Motor sport has chewed up and spat out a lot of people who have the wherewithal
of Paul."
Is a move back to Australia on the cards for Stoddart?
Not
likely, Harris says, although he will probably spend at least three months a year
here, as opposed to his annual one- or two-week flying visits.
Nor does the
Minardi sale spell the end of Stoddart's involvement in car racing. He has retained
a fleet of unique Minardi two-seater vehicles, some of which will be used to promote
Ozjet.
Harris returns to the Battler theme. "There's a passion there that
won't be drained by the sale," he says. "Basically, he's a dynamic, self-made
guy." By Michael
Lallo
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