Strategic Blow

As Qantas continues to battle with it's unions and tries to regain its reputation in the wake of its industrial dispute Australia's newest airline is preparing a major assault on the market.

Strategic Airlines will relaunch as a low-cost carrier named Air Australia on November 15 2011, whilst also changing its colour scheme to green and gold.

The Australian owned and operated carrier is based in Brisbane and will travel to selected domestic destinations as well as Bali, Thailand and Hawaii.

Strategic Airlines was originally launched in September 2009 by chief executive Michael James and was then soley a charter carrier which flew Australian troops and their cargo to the Middle East on the A330.

After being given the go-ahead in 2010 by the International Air Services Commission on the grounds it would increase competition, Strategic Airlines expanded to include "niche leisure markets''.

Strategic began flying from Brisbane to Denpasar in Bali last December, with launch fares from $309 one way and from Brisbane and Melbourne to Phuket in Thailand in February, with launch fares from $299 one way.

It remains to be seen if Air Australia will be able to keep fares for these destinations to a minimum and therefore increase pressure on Qantas.

Qantas also continues to face increasing pressure from Richard Branson's Virgin group, with the Australian domestic carrier Virgin Blue relaunching under the Virgin Australia umbrella earlier this year.

It is expected that another new low-cost carrier, Scoot, will begin flying between Singapore and a range of destinations including Australasia next year.