Jetstar offers $149 one way to Beijing

The low-cost carrier, which is launching two-class Airbus A330 services to Beijing from Melbourne via Singapore in November, upped the price after two hours to $299 one way until midnight today, but signalled it would keep the pressure on lower-cost Chinese competitors with an everyday lead-in fare of $499.

Qantas was forced to axe its services between Melbourne and China and pull out of Beijing because it was unable to make money on the route, but Jetstar has been gradually increasing its presence in China.

Counting Taipei, Hong Kong and Macau, Beijing is its ninth destination in greater China.

The airline has yet to publish airfares from China but is looking to capitalise on what is expected to be Australia's biggest inbound tourism market by 2020.

Almost nine million people travelled in and out of Beijing in the first half of this year, up 11.9 per cent on the same period last year, and the number of Chinese visitors to Melbourne has grown significantly in the past year.

Australia is also home to about 200,000 Chinese-born residents, 50,000 of them living in Victoria, and almost 170,000 Chinese students are studying in Australia.

There are about 5000 Australians living in Beijing.

Jetstar chief executive Bruce Buchanan said the airline would concentrate on leisure, visiting friends and relatives and small business traffic rather than business travellers. "We will be very, very competitive," he said.

The move came as a government survey showed the lowest domestic fares this month were almost 30 per cent higher than a year ago. But both Virgin and Jetstar expressed doubts about the jump, saying it was not reflected in their figures.

The figures released by the Bureau of Infrastructure, Transport and Regional Economics show that the lowest discount airfares this month are the highest since December.

They are also about 9 per cent higher than the previous month. The index does not give dollar terms but couches airfare movements in terms of an index compiled from a survey of the lowest available fares in several fare categories each month.

It does not analyse the figures either, so it is not clear how much of the increase stems from the grounding of Tiger Airways Australia and having its discount fares taken out of the equation.

This month's index shows that restricted economy fares are down 28 per cent on a year ago but business class fares are up almost 15 per cent. Full economy fares are down about 2 per cent.

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