UPDATE: Unfortunately, the information earlier provided to Australian Business Traveller by a PayPal spokesperson with regard to Jetstar was incorrect: there is no Jetstar iPhone app on the way, nor was there a 20% cash back offer as we were told and reported in our original story.
Nonetheless, there is some good news -- Jetstar is now accepting PayPal payments on its website (with no booking fee). This is a welcome move for Mac users who want to pay using direct debit, since the current "POLi" system used for online payments only works on Windows.
Separately, there's a new Webjet app which allows you to book flights and pay by PayPal on your iPhone. (The Webjet app recently had a 20% cashback offer, but this has now expired.)
Jetstar will allow surcharge-free payments via PayPal by the end of the week, and is offering a surprisingly generous 20% cash-back for a limited time.
The PayPal payment system will only be available initially via a new Jetstar iPhone app that will allow passengers to book and purchase flights from within a single app on their smartphone.
According to a spokesman, the cash-back will be deposited back into the passenger's PayPal account, and it won't be able to be withdrawn as cash back into a bank account, but will be able to be spent through PayPal on other things.
The Jetstar app is currently awaiting Apple's approval in the iTunes Appstore, but Jetstar and PayPal are hoping it will be released by the end of the week.
Jetstar has beaten its corporate parent to bookings on the smartphone -- Qantas' mobile website still doesn't allow bookings to be made (though if your smartphone's browser is capable enough, you can complete a booking through the full version of the website.)
Like most airlines, Jetstar's payment methods have been controversial -- it levies hefty surcharges for credit card payments (though admittedly, the lowest of all Australian domestic airlines) and provides a cumbersome method of paying from bank accounts -- a system called POLi, which only works on Windows PCs and has to be downloaded and installed.
Although it isn't yet offering PayPal via its main website, passengers will now at least be able to pay for flights fee-free using PayPal via the new Jetstar app.
Jetstar is also due to launch its iPad-based inflight entertainment system this month.