Budget 'Air Australia' to fly after Qantas chaos

An Australian air-charter company said on Wednesday it will launch a new budget carrier flying passengers both domestically and to regional tourist hotspots in the wake of Qantas's grounding crisis. Stategic Airlines said it will add more routes to its existing line-up and rename itself "Air Australia", with jets sporting the iconic green and gold usually associated with the nation's sporting teams. "Strategic Airlines will retire its name, red white and blue brand and full service business model commencing from 15 November 2011 to become Air Australia, a new international and domestic low-cost carrier," the firm said. The move comes after Tens of thousands of Australians were stranded over the weekend when flag carrier Qantas grounded all its fleet worldwide amid an ongoing row with unions, doing serious damage to its reputation. The first Air Australia flight will also take off on November 15, and the new brand will absorb Strategic's routes to Bali in Indonesia and Thailand's Phuket, before launching a brand new service to Honolulu in December. The island destinations are extremely popular with Australian tourists. The airline will also continue Strategic's flights from Brisbane and Perth to key mining destinations at Port Hedland and Derby, in the minerals-rich Kimberley region, chief commercial officer Damien Vasta said. Domestic services will start between Melbourne and Brisbane, he added. Air Australia will next month add a second Airbus A330 to its fleet, which also contains three A320s, and Vasta said it will be targeting up to five flights a week to Bali and as many as three a week to the other foreign ports. The airline will officially launch its brand and staff uniforms on Thursday, just days after Qantas's dramatic grounding. Vasta denied the launch's timing was linked to the Qantas chaos but said it did "establish I think to the Australian travelling public that they want competition. "They need to see that there's options out there because they don't want to be dependent on one airline. Because as you know things do happen that stop airlines from flying," he said. "... and we certainly want to be better positioned to be able to meet any demand shortfall." Brisbane-based Strategic was founded in 1991 as an air freight broker and had its breakthrough as a defence contractor for the Australian government transporting troops and cargo to the Middle East between 2005 and 2010. Vasta said the company had been able to grow its commercial business from contract work and began passenger flights in 2009. Air Australia will offer a low-cost model that includes baggage in its ticket price but requires passengers to pay for meals, refreshments and entertainment. Vasta said the soaring Australian dollar was the main driver of the low-cost airline industry, with international travel now increasingly affordable for a wider range of people and often cheaper than holidaying at home. Qantas's rivals including AirAsia X -- the long-haul affiliate of Malaysia budget carrier AirAsia of which Richard Branson's Virgin Group owns a stake -- stepped in with discount fares and extra capacity to help marooned passengers. Singapore this week launched a long-haul budget carrier, Scoot, amid thriving rivalry for Asia's growing ranks of middle-class travellers.