- CAPA Analysis
- Schedule Analysis
- Cargo Analysis
- Route Maps
- Fast Fact Report
Based in Singapore, Jetstar Asia is a low cost airline. Using the Qantas Group's Jetstar brand, Jetstar Asia has a network of services within Asia using A320 aircraft. Jetstar Asia/Valuair is 51% held by Westbrook Investments Pte Ltd (Westbrook) and 49% by Qantas.
Location of Jetstar Asia main hub (Singapore Changi Airport)
LCCs will continue to evolve into hybrids of the original core model. CAPA and OAG consider Jetstar Asia fits the LCC profile and it is included in our reporting on this basis. Please note: when reporting for an airline is changed from or to LCC the historical data is not affected and it can lead to a distortion in the current reported data. Contact us if you have any queries.
384 total articles
65 total articles
Every two hours, an Emirates aircraft – half of them A380s – departs Dubai for Australia. After India, the UK and US, Australia is Emirates' fourth largest market by seat capacity deployment but second largest, after the US, for available seat kilometres.
About one in every 10 seat kilometres flown by Emirates is en route to Australia. Emirates is the largest international airline in Australia after Qantas while its neighbour, Etihad Airways, is eighth largest. Etihad in Australia punches above its weight: globally it is 37% the size of Emirates but has 45% as many seats to Australia as Emirates does.
Qatar Airways is missing out. If its Australian capacity was in proportion to Emirates the way Etihad's is, Qatar would have around 18,000 weekly seats and 50-60 weekly flights, placing it on the heels of Cathay Pacific as the seventh largest airline in Australia. Instead Qatar has only 14 weekly flights, 4,700 seats and is Australia's 18th largest carrier.
LCCs now account for more than one in four airline seats worldwide, whereas within Southeast Asia close to three in every five seats are now produced by LCCs. In virtually every region worldwide, LCCs are the growth engine within the airline business. But the airports they serve were often built in a very different era. As a result, there is commonly a mismatch between airport infrastructure, technology and services and the contemporary needs of LCCs.
Airport managers and government regulators can also lack insight into the drivers of the LCC business model. Meanwhile, there are different types of LCCs, as many adopt the features of their full service counterparts and ‘hybridise’.
This essential one-day CAPA Summit in Bangkok aims to help bridge the gaps in awareness that exist between the stakeholders - to help create the conditions for a win-win in Asian aviation and beyond.
The CAPA Summit will be held at the Shangri-La, Bangkok on 15 September, with a welcome reception, hosted by AirAsia, on the evening on 14 September.
AirAsia has signed up as the anchor tenant for Changi Airport’s T4, a new hybrid terminal which is slated to open in 2017. AirAsia expects to reduce its operating costs significantly in Singapore as it moves from T1 to T4, giving it a better foundation to allow it potentially to resume expansion in Singapore.
AirAsia grew rapidly in Singapore from 2008 through 2013 but cut capacity in 2014 as market conditions became extremely challenging. Lower operating costs, driven by automation of passenger services, and incentive packages should make it easier for AirAsia to add capacity on some of its 15 existing routes from Singapore and launch new routes.
AirAsia could also potentially use T4 as a transit hub by introducing its Fly-Thru product in the Singapore market. Although it is not a hub or base Changi is AirAsia’s third largest airport. Only Kuala Lumpur and Bangkok have more AirAsia seats than Singapore.
Myanmar National Airlines (MNA) plans to launch services on the highly competitive Yangon-Singapore route in Aug-2015 as it starts to implement an ambitious international expansion plan. The newly rebranded government-owned carrier took delivery of the first of 10 737-800s in Jun-2015 and plans to operate five international routes by early 2016 as it grows its new narrowbody fleet.
But the airline faces huge challenges as it operates outside the domestic market for the first time in two decades. The Yangon-Singapore market is already experiencing overcapacity and Myanmar-based carriers have struggled to compete against their Singaporean competitors, forcing cutbacks at Myanmar Airways International (MAI) and the withdrawal of Golden Myanmar Airways.
MNA will inevitably face the same challenges in Singapore as other Burmese carriers, particularly given its brand is an unknown in the international market. North Asia, which MNA plans to enter in the coming months, will also be a challenging market.
Singapore-based LCC Tigerair has cut capacity on 13 routes and suspended seven routes entirely as part of a network restructuring. The cuts have driven a reduction in Singapore's LCC penetration rate and led to a better supply-demand balance in a market which had been – and to some extent still is – suffering from overcapacity.
But the reductions at Tigerair also have created opportunities for competitors. While one of the other two main LCC players in the Singapore LCC sector, AirAsia, also has responded to the challenging market conditions by cutting capacity, Jetstar has quietly expanded.
Jetstar has added capacity over the last year on nine of the 13 routes it competes against Tigerair. Most of these routes have seen Tigerair reductions.
Tigerair's pan-Asian vision is in abeyance. The Singapore-based LCC has reported more losses for the quarter and year ending 31-Mar-2015. The group has now been in the red for four consecutive years, accumulating losses of over USD500 million.
But Tigerair’s outlook for the fiscal year starting 1-Apr-2015 (FY2016) is brighter as the group closed or sold its highly unprofitable overseas joint ventures in FY2015 and restructured its Singapore operation. The group also reduced the size of its fleet in FY2015 by subleasing aircraft and cancelling orders, a painful but necessary exercise. Tigerair is now planning to sell two more A320s in FY2016 as it reduces its operating fleet to only 23 aircraft.
Tigerair Group’s current seat capacity in Singapore is down by about 16% compared to May-2014, with nearly all the reductions occurring on competitive routes as Tigerair has been launching new routes which are not served by other LCCs. Total LCC capacity in Singapore also has been reduced, enabling Tigerair and other carriers to boost load factors and yields. But Tigerair continues to warn of overcapacity and intense competition in the Singapore market, which could impact its ability to complete a turnaround and become profitable in FY2016.
This is Part 1 of CAPA's analysis of the Singapore LCC sector.