Jetstar also now gives customers with more expensive tickets priority boarding, although it plans to retain unallocated seating for reasons of efficiency. The airline buys the points from its parent but strategically recovers costs by prompting people to buy more expensive tickets and attracting back customers (Creedy, 2005). The carrier's frequent-flyer scheme has produced a revenue gain that offset its cost, such as big business routes, an immense amount of the business traffic that was lost (Creedy, 2005).

Virgin Blue's Strategy

Virgin Blue's competitive strategy is similar to Qantas, in that changing people's attitudes toward air travel is the key to growth of budget airlines. Virgin Blue has cut their costs by cutting extras on flights, such as paper tickets and free meals. The danger that Jetstar faces in cost-cutting is that the number of airline tickets sold may not outweigh the costs of the domestic carrier. Jetstar needs to...
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