Jump hoping for $39 main trunk fares

By DANIEL RIORDAN

Would-be budget carrier Jump Airlines claims it will offer main trunk airfares of $39 (including tax and levies) when it starts up next year.

Jump is aiming to fly between Auckland, Palmerston North, Wellington and Christchurch from next April, using two 171-seat Boeing 737-700 jets.

The only information on the airline has come through Steve Mosen, a former Air New Zealand pilot and cofounder of failed budget carrier CityJet.

Mosen says he is acting as an unpaid consultant to Jump, which is backed by mainly European investors.

On Tuesday, Mosen released details of Jump's directors and key executives, without naming them.

Mosen said Jump's chairman and founder was a French national with a background in transport and exporting. One of the directors is an Australian with a background in international sales and IT management at Nortel.

Two other directors are New Zealanders, one with real estate experience, and one with previous airline management experience.

Its chief executive is a New Zealand resident with airline experience and its chief financial officer a European national with a major accounting firm.

Jump's chief pilot is a New Zealander working with a British low-cost carrier, and its chief engineer is a New Zealander working for a low-cost carrier in North America.

Mosen said the names would be made public when the airline completed its submission to the Civil Aviation Authority for an air operator's certificate in August.

Mosen said Jump would be able to offer fares as low as $39 through a combination of low base costs and the creation of new markets in people who didn't, or couldn't afford to, travel.

The airline's motto will be "no rules" (meaning no complicated fare structures), "lowest fares" and "safety always." Staff will be offered stakes in the airline.

Mosen said the low-cost model worked in New Zealand, provided an airline had strong management and funding.

He does not expect Virgin Blue to fly here and believes Air NZ will absorb its low-budget arm Freedom Air as part of its expected restructuring to a low-cost carrier.

Mosen said he hoped his efforts in promoting his vision of a successful low-cost airline, owned by New Zealanders, to a group of European investors might lead to his taking a formal role in the airline "in due course."

To achieve that, however, he will need the consent of the Official Assignee after being declared bankrupt following CityJet's collapse in November 1999.

Ewan Wilson, who set up transtasman budget carrier Kiwi Air and ran it for four years in the early 1990s before it collapsed under the weight of competition from the bigger players, said Jump would have its work cut out, although he respected Mosen's abilities. He said there was already overcapacity on the main trunk and Air NZ and Qantas would fiercely defend their territory.

Wilson, who lectures part-time on aviation management at Waikato University, said there was space in the market for small savvy operators on regional routes - witness Nelson-based Origin Pacific.

Jump was working to a tight launch date with no room for slippage on regulatory and operational preparations, and Wilson said the airline would find it extremely difficult to offer viable fares as low as $39.

He said the all-inclusive cost of flying a 737 was about US$5500 ($12,000) an hour. If the planes flew at 50 per cent capacity (85 passengers) the cost would be $141. Even if fully loaded, the cost per passenger would still be $70.

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