Virgin Blue, Qantas, Jetstar and Regional Express have been commissioned to provide travel services for the whole of Australian government, which is aiming to slash $160 million in travel costs over the next four years.
Under the new arrangements, which will take effect from July1 this year, the four carriers will compete for their share of government travel spending based on pricing submitted during the tendering process, which opened last year. The government has also released new travel guidelines for public servants which place importance on gaining the lowest practical fare, while those flying on the contracted carriers would not be able to accrue airline loyalty points.
While it is set to lose its grip on the travel market, Qantas spokesman David Epstein welcomed the new arrangements. “The new framework strikes the right balance between fare levels and convenience as the criteria for whole-of-government travel decisions, and we are confident that we will be able to compete strongly on this basis.”
Virgin Blue also welcomed the announcement, and is also set to gain on the international front with Pacific Blue and V Australia chosen to provide international travel in a separate contract. Qantas and Jetstar’s international services have also been recognised in the contract.
Other international airlines retained under the new process include Air New Zealand, Cathay Pacific Airways, Emirates, Etihad Airways, Qatar Airways, Singapore Airlines, Thai Airways, United Air Lines and Virgin Atlantic. Separate contracts for travel management services have also been awarded to American Express International, Carlson Wagonlit Australia, Flight Centre, Hogg Robinson Australia and QBT.
The new arrangements are expected to be a particular boost to Virgin Blue, which has for a number of years been trying to make inroads into the lucrative government travel market which has for many years been dominated by Qantas.