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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. (See also: Jetstar Pacific in Vietnam, which is 30% held by Qantas with other shareholders including its largest shareholder, State Capital Investment Corporation, Saigon Tourist Holding Company and Mr Luong Hoai Nam, CEO of Jetstar Pacific.)
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.
221 total articles
Qantas and Jetstar Airways: ACCC approves determination for coordination with Jetstar joint ventures
39 total articles
This is the third report in a three-part series on Jetstar’s Singapore-based operations, which includes Jetstar Asia, Jetstar Airways and Valuair. The first two reports analysed Jetstar’s position in two key markets, Singapore-Indonesia and Singapore-China. This report looks at other markets and Jetstar’s overall outlook in Singapore.
Over the last year Jetstar has slowed down fleet and ASK expansion from Singapore after a period of rapid capacity growth for all of the country’s major LCCs, intensifying competition and impacting profitability. Seat capacity, however, has continued to grow rapidly as Jetstar Asia has increased its focus on short-haul Southeast Asian markets, particularly Malaysia, while decreasing its focus on medium-haul flights to North Asia, particularly mainland China.
In the coming months Jetstar Asia/Valuair will take two more A320s for a total of 20 aircraft, with the additional capacity once again being allocated to short-haul markets, primarily neighbouring Malaysia and Indonesia.
This is the second report in a three-part series on Jetstar’s Singapore-based operations, which includes Jetstar Asia, Jetstar Airways and Valuair. The first report analysed the booming Singapore-Indonesia market, where Jetstar is now looking to expand after several years of flat capacity.
This report looks at Jetstar’s position in the Singapore-China market while the third part will look at the overall outlook for Jetstar Asia. Jetstar has significantly cut back in the China market since the end of 2011, reversing a strategy from 2010 and 2011 that focused on using its Singapore hub to pursue rapid growth throughout mainland China. This strategy included using Jetstar Asia’s A320 fleet to operate medium-haul flights to southern China while using Jetstar Airways’ A330 fleet to access markets in northern China that are beyond narrowbody range from Singapore.
Jetstar aims to catch up in Indonesia after squandering first mover advantage inherited from Valuair
The Jetstar Group is preparing to increase its presence in the booming Indonesia market with additional services from its Singapore hub. The expansion follows several years of relatively flat capacity to Indonesia for Jetstar while its LCC competitors have pursued rapid growth.
Jetstar faces challenges as it tries to catch up on several years of missed opportunities in the Indonesian market. The group may struggle to compete with larger players, most of which are also pursuing rapid capacity expansion. Jetstar lacks an Indonesian affiliate, making it difficult to sell in the local Indonesian market, which remains heavily dependent on travel agents.
But the opportunities in Indonesia are too humongous for the usually conservative Jetstar to pass up. It needs to make a push or risk being shut out entirely in one of the largest and fastest growing markets in Asia.
Passenger growth at Singapore is slowing significantly, making it very unlikely Changi will expand in 2013 its current streak of three consecutive years of double-digit expansion. Growth in the low to mid single digits will provide some breathing space for authorities to tackle increasing congestion problems. But Singapore authorities should still accelerate airport expansion, particularly the opening of a third runway, because the current congestion has already become an impediment to growth.
In the latest blow to Changi, AirAsia has decided to close its Singapore base. Shifting back to Malaysia the group’s small contingent of Singapore-based crews will have a very slight impact on total passenger figures at Changi. But it signals the challenges Changi faces as its LCC growth figures start to slow down while other airports in the region continue to record rapid increases.
The AirAsia decision follows Qantas moving its transit hub for European services from Singapore to Dubai, leading to a reduction in total Changi capacity of more than 2%.
This is the second part of a report looking at the Indonesia-Singapore market and the impact of the recently expanded bilateral between the two countries. The first part looked at the Jakarta-Singapore route, which accounts for 55% of Indonesia-Singapore capacity and has not seen growth in recent years due to bilateral restrictions.
The other 13 routes currently connecting Singapore and Indonesia have not generally been constrained by the bilateral. But there are huge opportunities to expand capacity on these smaller routes, driven by Indonesia’s rapidly growing economy and Changi’s position as the leading international hub for secondary cities in nearby Indonesia.
Leading LCC groups – including AirAsia, Lion and Tiger – as well as full-service carriers, led by Singapore Airlines regional subsidiary SilkAir, are likely to launch new routes connecting Indonesia with Singapore as well as add capacity in existing markets.
Jakarta-Singapore, one of the world’s largest routes, will see a major surge of additional capacity in 2013 as a newly expanded bilateral between Indonesia and Singapore is implemented. Singapore-based low-cost carrier Tiger Airways and its new Indonesian affiliate Mandala Airlines will be the biggest beneficiary as the Tiger Group currently only has a paltry 5% share of capacity in the Jakarta-Singapore market. Tiger and Mandala are each preparing to add several daily flights on the route, supplementing Tiger’s current schedule of only two daily flights.
Other LCCs – including Indonesia AirAsia, Lion Air and Jetstar Asia – will also benefit from the new bilateral while full-service carriers are likely to see their market share drop, including market leader Singapore Airlines (SIA). AirAsia and Lion will be keen to add Jakarta-Singapore flights to maintain their leading shares of LCC capacity in the market as Tiger/Mandala attempt to quickly match or surpass their existing thicker schedules. AirAsia and Lion each currently operate six daily flights on the route.
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