Australia-Asia connections improves as Jetstar Asia resumes network growth which includes Okinawa

Jetstar Asia launched three new routes in Nov-2017, extending the Jetstar Group’s Singapore based affiliate network to 28 destinations.


Summary

  • Jetstar Asia launched three new routes in November – Singapore to Clark, Hat Yai and Okinawa;
  • Jetstar Asia is the first Southeast Asian airline to serve Okinawa and is providing connections for passengers originating in Australia;
  • Jetstar Asia is reducing frequencies to existing destinations to free up capacity for the three new routes;
  • Jetstar Asia has not expanded its fleet since 2014 and ASKs have been on the decline the last two years.

Jetstar Asia has become the first Jetstar airline to serve Clark in the Philippines and Hat Yai in Thailand. The third new destination, Okinawa, is already served by Jetstar Japan from Nagoya, Osaka and Tokyo.

Jetstar and full-service parent Qantas are selling connections from Australia to all three new Jetstar Asia destinations. Jetstar Asia CEO Barathan Pasupathi told CAPA TV the Clark and Hat Yai services are catering mainly to point to point passengers while Okinawa is expected to more significant volumes of transit traffic.

Mr Pasupathi expects particularly strong demand for Okinawa from Australia and Indonesia. Jetstar Asia is the first airline from Southeast Asia – or any region but North Asia – to operate scheduled services to Okinawa. The popular resort island’s only other link to Southeast Asia is a service to Bangkok operated by Japanese LCC Peach.

Given Okinawa’s location south of mainland Japan, it is more convenient to fly to Okinawa from Southeast Asia and most of Australia via Singapore than Osaka or Tokyo. Almost all Okinawa traffic consists of inbound visitors.

Clark, Hat Yai and Okinawa mark the first new destination for Jetstar Asia since late 2015, when the airline added Palembang, Pekanbaru and Da Nang. In 2016 the airline did not launch any new destinations but dropped Fukuoka, which had been served via Bangkok.

Jetstar Asia has not suspended any routes in 2017 but is reducing frequencies to some of its existing destinations in order to free up capacity to support the three new routes. Jetstar Asia’s fleet has been maintained at 18 aircraft since 2014 and the airline’s ASKs declined in both 2016 and 2017.

Jetstar Asia’s ASKs were down 4.6% in 2016 and 3.5% through the first nine months of 2017. RPKs were down a more modest 1.2% and 2% respectively as Jetstar Asia has been able to boost its load factor, driven by growth in interline and codeshare traffic.

Passenger numbers have also increased, by 5% in 2016 and 2% in the first nine months of 2017, as the airline’s average stage length has declined. Jetstar Asia has been able to steadily grow passenger traffic over the last four years, from 3.9 million in 2013 to approximately 4.3 million passengers this year, despite not growing the fleet.

Mr Pasupathi said the drop in ASKs over the last two years were necessary as the fleet has required heavy maintenance checks. “We believe ASKs will come back up over time, but at least for next 12 months we are still under the heavy maintenance cycle,” he said.

While Jetstar Asia continues to explore opportunities for network expansion the airline is not ready to resume fleet or capacity expansion. “We aren’t going to chase growth for the sake of chasing growth,” Mr Pasupathi said. “Southeast Asia needs to see some level of rationalisation; rationalisation in Indonesia, rationalisation in Vietnam, even in Singapore. Once that happens and slots open up we will be in markets.”