Airline for Oz-bound backpackers

AN Australian businessman plans to start a low-cost airline, flying between the UK and Australia and dedicated to the backpacker market, by August.

The airline, Backpackers Xpress, plans to fly three times a week from Manchester to Melbourne via New Delhi and Bangkok and twice a week from Munich.

BXP, is the idea of Glenn Millen. Gene Mashlan, who used to work for Airtours and MyTravel in the UK, will be chief executive. The company is negotiating with Singapore Airlines to provide the aircraft - initially two rising to five later in the year - for the service, dubbed the 'pub in the sky'.

'Singapore Airlines would provide all the aircraft support and maintenance,' Millen says. 'While the model might provide a fun trip for the younger backpacker market, we are a serious airline.'

He has assembled a group of aviation veterans around him, including operations director Gordon Layton, a former Royal Australian Air Force group captain, who was once air attaché to London.

Singapore Airlines confirmed that it was in talks with BXP but denied it was seeking an equity position with the start-up.

'We were pursuing the equity option but now our preference is to remain independent if we can because of the niche focus of our market,' Millen said. 'We don't want to be managed by the majors as we would risk losing the culture that makes us different.'

That culture would reflect backpacker tastes and include song competitions with prizes such as diving trips. Pies, pizza and beer would be on the menu. Millen expects a return fare of between £500 and £550.

'But the key difference is that it will be fully flexible. Most backpackers come down here on a 12-month working holiday visa. The typical pattern is to then leave the country after that for New Zealand and come back on a three-month tourist visa. As most airfares expire after 12 months, changing return dates can be very expensive,' Millen said.

The industry welcomed the possibility of the new airline. James Parker, editor of TNT Magazine in Sydney, said seat capacity in the economy market had long been a serious issue. 'If it comes off, it would be fantastic,' he said. 'Anything that gets more bums on seats to Australia is a good thing as far as we're concerned.'

A recent spate of media attention on the project has created interest among corporate Australia with several banks considering investing in BXP.