The Qantas Pan Asian strategy doesn't seem to have worked too well either, and Jetstar Pacific (Vietnam) would probably be up for the chop if Jetstar Asia goes. Ten aircraft up against the likes of Vietjet Air and Bamboo Airways wouldn't be a serious proposition, especially without access to a wider network. Tiger Airways tried expansion in Indonesia, Taiwan, Philippines and Australia without success. Going up against large, well established local airlines on their home turf with a considerably smaller fleet and hoping to gradually build up hasn't worked for foreign airlines.
AirAsia (Malaysia) and Cebu Pacific have grown strongly from a small size, but they were operating in their home countries and their only competition was an inefficient and expensive national airline which they could easily undercut with the proven low cost business model. They got in at the right time and filled the gap.
Jetstar Hong Kong never got off the ground, QF are a minority shareholder in Jetstar Japan and could decide to sell out to Japan Airlines and leave it to them to run as their own rebranded low cost subsidiary.
Singapore Incorporated won't step in to prop up a loss making, billions in debt with profits years away, Virgin Australia in its present form. Keeping the SIA group going is already a big drain on government resources.
Stemming losses and making consolodations will be the new order, profits will be difficult enough, even without capacity and price wars.
QF would probably be happy with its 65% line in the sand domestic share together with the regional and international network. They are one of the few airlines that we can be reasonably sure will still be standing at the end of the current pandemic. News reports have now stopped referring to a recession and are talking about a depression instead.
The question is who will fill the remaining 35% of the domestic market. A Virgin mark 2 with 40 B737s or a Lion Air Australia operation with similar numbers would enable QF to retain JQ though they would probably restructure it into a smaller size without the B787s and Asian subsidiaries.
Virgin going under without a replacement to fill the gap could require QF to divest itself of Jetstar. A spun off JQ with 35% market share and no competition within that sector would be a more attractive proposition for investors than bailing out Virgin and having to compete with QF at the top and JQ at the bottom.
There could be an unspoken, cosy arrangement where QF set fares which maintain profitability and shareholder return for them, the competing set up are about 15% less ie not enough to make QF customers trade down but too much to make the bogans trade up. Occassional snap sales of a few seats at 50% off by both airlines and you have the impression of competition which keeps everyone happy. Passengers pay higher fares but services are maintained and both operators make money.
Last edited by krismiler; 10th Apr 2020 at 02:32.