Jetstar mulls Melbourne expansion

[Will T]

Jetstar mulls Melbourne expansion
Mathew Murphy
May 19, 2008

MELBOURNE AIRPORT is talking to Jetstar about building a multimillion-dollar terminal for the low-cost carrier to cope with record demand in the domestic market.

The airport is considering expanding Terminal 4, opened in November to accommodate the arrival of Tiger Airways.

However, its bitter rival Jetstar would not need to share the tiger's den, with possible plans including the building of an adjoining terminal for Qantas's budget offshoot.

The airport's freight operations would need to be moved from next to T4 to make way for Jetstar's burgeoning operations.

Recent figures from Melbourne Airport show a record 14 per cent growth in passengers flying domestically. If that rate continues, Jetstar will soon outgrow the home its shares with Qantas at Terminal 1. Jetstar has eight domestic aircraft based at Melbourne Airport operating 200 domestic flights a week, compared with 84 return flights a week from Avalon Airport.

While the plans are still being developed, sources say the total upgrade to Terminal 4 and the freight centre would cost hundreds of millions of dollars.

It forms part of the airport's master plan, the subject of public consultation that will end on July 11. If the upgrade is approved, it would take an estimated five years to complete.

A Melbourne Airport spokesman, Geoffrey Conaghan, said the upgrade would need to be considered alongside the $330 million development of T2, the international terminal.

"We would do the project in an economically responsible way; we would not want to lose our rating from Moody's," he said.

"Once the consultation period is up we will have a clearer indication of the broad expansion plan. I think it is a signal, though, of the sound state of the Victorian economy that we could even talk about these developments while undertaking such a massive project like the international terminal upgrade."

A Jetstar spokesman, Simon Westaway, said the airline was not interested in T4 "as it currently stands" but nor was it looking at moving into "a Taj Mahal".

"We will be interested to see what Melbourne Airport comes up with," he said. "I can confirm with you we have had discussions with Melbourne Airport; we have discussions with a lot of airports about growth.

"From our perspective, though, in terms of any new terminal infrastructure we will consider it subject to reasonable commercial terms and subject to a reasonable customer proposition."

The proposal would also be subject to planning approvals from the Federal Government.

SMH Online
http://business.smh.com.au/jetstar-m...0518-2fle.html