Qantas faces tough new competition on the Kangaroo Route to London, writes Clive Dorman.

Battered by the strength of Singapore Airlines for decades, threatened more lately by the success of Dubai's high-quality upstart Emirates Airlines, Qantas this week faced the first real low-cost assault on its so-called Kangaroo Route to London.

Malaysia AirAsia X, which already operates daily services to Kuala Lumpur from Melbourne and Perth and four a week from the Gold Coast, this week launched five daily connections from Kuala Lumpur to London's low-cost hub, Stansted Airport, charging little more than $1000 return for the entire journey.

Qantas had planned to have its low-cost subsidiary, Jetstar, flying to Europe by now but those plans were scuttled by Boeing, which has run into problems producing its new Dreamliner jet, the Boeing 787.

Qantas has orders and options for more than 100 of the new 300-seat Dreamliners - the first batch of which will go to Jetstar - but its delivery is running two years behind schedule because of teething problems with the radical new plane, which airlines love because it is 25 per cent more fuel efficient per seat than the old 747.

The best Qantas can do between Australia and London is about $2000 return. No-frills AirAsia X is charging about $1200 return from Melbourne, although the fare can vary depending on how far ahead you book, the season and and the number of "extras" you require - such as meals and checked luggage.

Qantas retains the advantage that its service is fast and all the extras are included, whereas the AirAsia X experience is anything but simple and convenient. If you want to fly from Australia to London, you have to book twice - once to get to Kuala Lumpur and the separate flight from KL to Stansted (north of the capital but, like Heathrow, with a train service into the city).

You'll almost need the skills of a travel agent to make sure your flights roughly connect.

It may not be what passengers are used to on competing airlines but for AirAsia X chief executive Azran Osman-Rani, the system works. "Even today, 85 per cent of our Australian passengers are not ending their journey at Kuala Lumpur," he says. "They're used to buying two tickets. That's the whole idea - keeping it simple, otherwise you add complexity and cost."

Unlike Qantas, which is highly dependent on business travellers - who have been hit by the global downturn - Osman-Rani says his airline sees nothing but growth ahead. He says he has noticed a temporary slowdown in bookings on AirAsia X's daily services from Melbourne to Kuala Lumpur, which attributes to the recent bushfires. He sees only blue skies three months down the track.