Jetstar's three-year agreement with Changi Airport Group (CAG) to expand its based operation in Singapore is significant for a number of reasons. For its fleet strategy, the contract paves the way for the carrier to add additional A320s to its fleet of eight aircraft at Singapore, as well as to add widebody aircraft (A330-200s) in order to serve long-haul routes.
Simon Westaway, head of corporate communications, told Routes News: “We will continue to focus on increasing flights within Asia as part of our pan-Asian strategy and services to Europe are also an option in the future.”
The agreement with CAG is a triumph for Jetstar’s expansion plans as it strives to become the number one low-cost operator in Asia-Pacific. It is however a set back for other Asian hubs which were options for Jetstar, such as Hong Kong, Bangkok, Kuala Lumpur and Ho Chin Minh City. Jetstar had sent out an RFP to these airports inviting bids for their aircraft to potentially be based elsewhere in the Asia -Pacific region.
And the new arrangement with CAG will also allow the carrier to grow the percentage of transit and transfer traffic through the airport and to serve markets that it could not serve directly.
Using Singapore as the primary access point into Asia is also important in the context of its closely aligned Singapore and Australian-based businesses, says Westaway.
CAG will support Jetstar’s continued growth in Singapore with various incentives under the Changi Airport Growth Initiative, which was introduced on January 1 this year.
The incentives will, in turn, enable Jetstar to lower its operating costs in Singapore, adding to the revenue savings that the carrier could potentially secure through its new strategic alliance with AirAsia.
Perhaps equally important is that Jetstar will receive additional incentives from the airport operator for launching routes that are currently unserved.
On Tuesday February 2, Jetstar became the first foreign carrier to launch a scheduled service to Shantou in China from its new hub. The carrier has identified China as a key market for its future growth, Westaway explains.
“China holds immense potential for our low fares offering and for connections throughout our broader Qantas Group network. Plus, we continue to focus on key leisure and VFR markets, and this will remain an important part of our strategy.”
In the Asia-Pacific market, Jetstar will face intense competition from low-cost carrier competitor Tiger Airways, who will be sure to react to any new routes that Jetstar announces in order to protect their market share in Singapore.
However Jetstar’s joint venture with AirAsia is well-placed to become the dominant low-cost partnership in the Asia-Pacific region, potentially marginalising Tiger Airways (particularly its Singapore operation) and providing a united from against Tiger.
Jetstar’s Asian Network
Jetstar is currently the fourth largest carrier in Singapore in terms of weekly departures, operating 125 weekly services and connecting the hub to 14 destinations.
The largest carrier is Singapore Airlines, followed by its regional subsidiary Silk Air and then Tiger Airways.
Jetstar currently operates the following weekly schedule from Singapore:
| Destinations | Weekly frequency |
| BKK | 20 |
| KUL | 19 |
| HKG | 14 |
| PEN | 14 |
| HKT | 14 |
| SGN | 8 |
| TPE | 7 |
| MNL | 7 |
| BKI | 4 |
| RGN | 4 |
| HAK | 4 |
| KCH | 4 |
| PNH | 3 |
| REP | 3 |
| Total (weekly) | 125 |
Source: Flightbase (schedule for February 1-7, 2010)
As the table below shows, Jetstar's competitors, Tiger and Silk Air, largely mirror its network, with only Taipei and Manila being operated only by Jetstar (with seven-times weekly flights for both operations).
Schedule summary of destinations served by three carriers as follows:
| Destination | Jetstar | Tiger Airways | Silk Air | Total frequency (weekly) |
| KUL | 19 |
23 |
37 |
79 |
| HKT |
14 | 12 | 28 |
54 |
| PEN |
14 |
12 |
21 |
47 |
| BKK |
20 | 18 | 38 |
|
| HKG |
14 | 14 | 28 |
|
| SGN |
8 | 15 | 23 | |
| RGN |
4 | 16 | 20 | |
| MFM |
7 | 10 | 17 |
|
| PNH |
3 | 12 | 15 |
|
| HAK |
4 | 7 | 11 |
|
| KCH |
4 | 4 | 3 | 11 |
| REP |
3 | 6 | 9 |
|
| BKI |
4 | 4 |
8 |
|
| TPE |
7 | 7 |
||
| MNL |
7 |
7 |
Source;Flightbase (1-7 Feb)
Where Next?
With Jetstar focusing on the Chinese market and Changi incentivising routes that are not served from Singapore, it is interesting to note that over 20 markets in China have scheduled services from Hong Kong, but not from Singapore.
Therefore, potential destinations in China for Jetstar that have no services from Singapore could include:
- Zhengzhou - 7 x weekly flights from HKG
- Dalian - 7 x weekly flights from HKG
- Hangzhou - 35 x weekly flights from HKG
- Jinjiang - 18 x weekly flights from HKG
- Tianjin- 7x weekly flights from HKG
- Chengshou -13 x weekly flights from HKG
- Wuhan - 7 x weekly flights from HKG
With Jetstar committing to the SIngapore market, coupled with its recently signed agreement with Air Asia, the carrier is aiming to become the number one low-cost operator in the Asia-Pacific market. With the planned addition of widebody aircraft at the Singapore base, Jetstar will also have an eye on launching low-cost long haul services to Europe.
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