A thorn in Tiger's foot
Jetstar is planning to increase its fleet from 45 to 100 jets within the next three years and launch flights to Europe. It is also doing its best to upset its Singapore-based rival, part Singapore Airlines-owned Tiger Airways. In January, Jetstar chief executive, Bruce Buchanan, signed a three-year agreement with Changi Airport, committing to boost flight frequencies and destinations from Singapore.
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From left: Jetstar CEO, Bruce Buchanan, AirAsia Group CEO, Tony Fernandes, and Qantas Group CEO, Alan Joyce, at the signing of the Jetstar-AirAsia alliance deal |
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Speaking in Singapore, Buchanan said Jetstar, which has a 49% stake in Singapore-based Jetstar Asia, wants to bolster its presence in the city state and use the hub as part of its pan-Asian strategy to take advantage of low-cost carrier growth in the region. It also plans to boost engineering and other capabilities in Singapore.
Last year, had been a standout year in revenue growth for Jetstar, said Buchanan, and he forecast it would carry almost 14 million passengers in 2010. Ticket revenue is forecast to be above $2.5 billion across the Asia-Pacific, up from $1.8 billion last year.
Qantas Group chief, Alan Joyce, told Orient Aviation Jetstar Asia’s business “is ripe for a bigger network”.
The Singapore-based fleet will be increased from nine to 12 A320s this year. “We have expanded Chinese services from Singapore, we have expanded into Phuket and Bali and we are looking at a range of other destinations. We think getting critical mass in Singapore is vital,” said Joyce.
Focus on the Singapore hub will go ahead in conjunction with growing co-operation with new low-cost alliance partner, Kuala-Lumpur-based AirAsia. Joyce said the deal, which initially involves cost-saving co-operation in areas such as maintenance and spare parts, “is a great opportunity for us to grow our presence in Asia”.
With revenue and code-sharing on the agenda sometime in the future, he said the networks of AirAsia and Jetstar were complimentary. “AirAsia has a presence in Malaysia, in Thailand and Indonesia. We have a presence in Singapore, Australia and Vietnam and they are complementary. Anyone who gets Asia right has to cover all of those,” said Joyce.
Some deals may not be too far away. “There may be opportunities we think are too big an opportunity to pass up. It could be ad hoc rather than being systematic across the system. For example, AirAsia is keen to come on the Sydney-Kuala Lumpur route. It could get Jetstar to operate it and that could be the way you would start a partnership. It would be on a case-by-case basis.”
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March 2010 >
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