Jetstar Asia

Jetstar, with Guangzhou, continues China expansion as Australia and SE Asia take back seat

Jetstar Asia is continuing what it sees as the decade of North Asian expansion with a service to Guangzhou, the third largest airport in China with 1.1 million weekly seats available. By comparison, London Heathrow has 1.7 million weekly seats available. Jetstar sees greater growth prospects in North Asia, which has a LCC penetration rate of under 5% compared to approximately 30% in Southeast Asia.

The Guangzhou route is the latest in a big push by Jetstar into China. It launched service to Ningbo last month and is launching service to Beijing next month. With Guangzhou, Jetstar Asia will have seven destinations in mainland China and 10 in greater China. Two more Chinese cities are expected to be added by the end of this year and many more in subsequent years. “There are many, many cities” in China that Jetstar is prepared to serve, CEO Bruce Buchannan previously remarked.

Tiger looks to catch-up after rights issue and departure of founding CEO Tony Davis

Tiger Airways is trying to move forward after surviving the most challenging chapter in its six-year history, capped off recently by a further shake-up in Tiger’s executive team, with founding CEO Tony Davis leaving the group, and a rights issue. Tiger's position going forward is significantly improved, but it still has several challenges to overcome if it has any chances of catching up with rival LCC groups AirAsia and Jetstar, which have successfully established pan-Asian footprints while similar efforts at Tiger have so far failed.

Qantas profit doubling and strategic developments overshadowed by change resistance

Qantas has doubled its annual underlying pre-tax profit to AUD552 million on the back of the strongest performance in three years of its flying divisions. In the face of increased competition, the carriers has maintained a positive outlook – with further details emerging of its future strategy. But publicly the carrier’s position is shaky as it responds to claims of a takeover bid and faces heavy resistance from unions unwilling to accept that Qantas’ storied international operations must change, as outlined last week, if jobs are on the line.

Qantas and Jetstar plans for the long term: partnerships and Asian expansion, if the unions allow it

Increased reliance on the oneworld alliance and tapping into the growth potential of Asia are the cornerstones of a five-year plan to turnaround the Qantas Group’s international operations. The loss-making division Qantas is seeking to restructure through consolidated long-haul flying, a new premium airline will be established in Asia that will see Qantas introduce a third brand, and significant fleet and product changes have been announced. Qantas also confirmed it would establish a new Jetstar subsidiary in Japan with Japan Airlines and Mitsubishi. The carrier is finally owning up to irreversible changes in the competitive landscape. But the key risk lies in the implementation of the plan.

Jetstar's new North Asia focus leaves room for Qantas Singapore expansion to Europe and India

Jetstar is planning to expand its Singapore-based fleet by 50% over the next six months as the low-cost carrier group looks to North Asia for the next phase of its dramatic expansion. As the largest low-cost airline group in the Asia-Pacific region continues to expand at a rate of about 20% per annum, additional capacity will not be directed west towards South Asia, the Middle East or Europe but primarily to North Asia, where Jetstar sees the most opportunities given North Asia’s very low LCC penetration rate. This strategy could signal growth for the Qantas brand in South Asia and Europe as the group looks at potentially announcing next month the launch of a new Singapore-based full-service carrier.