Jetstar Asia made a profit, but no one will ever know what was booked as real ticket revenue, leasing revenue, or how costs were allocated across the Jetstar Group. As Jetstar Asia is not a listed entity they do not need to engage in arms lengths transactions with any other company. Their accounts are filed solely for tax purposes, just like Jet Connect is just a shell company through which QF runs its costs and some leasing of planes through NZ.
The latest accounts show Jetstar Asia's revenue fell 4 per cent to $S507 million last financial year. Its fuel bill and aircraft operating costs fell while marketing expenses rose substantially.
Read more:
Jetstar Asia records second profit
So Jetstar Asia's revenue fell - but their aircraft operating costs fell despite apparently operating the same number of aircraft.
Tiger Singapore just made a huge loss, with their unit costs rising, yields falling, and PLF plunging from 85% to 75%. They blamed overcapacity and intense price competition ex SIN. Just go and check what Jetstar Asia is charging KULSIN after the Chinese New Year Holidays (after 5 Feb) - and you'll know what I mean - most flights going for $0.
SIA itself is distancing itself from price wars and is charging what they please ex SIN to regional destinations - S$700 to Jakarta, S$850 to Manila and S$650 to Ho Chi Minh City are their normal fares. And SQ is full. The LCCS are just tripping over themselves to drive the airfares down to $0
In Tiger Singapore's latest accounts, they stated that the average length of their flights was 1800 km and average fare $99, and and average anciliary income $25. In the previous year, the average length of flight was also 1800km, but average fare $118. So they've taken a 20% hit on yield.
Jetstar Asia is smaller ex SIN and has to match Tiger's prices. I can't see how they are making a cent in this environment.
If Jetstar Asia was a standalone listed entity and had to declare their costs and revenue on an arms length basis, we would then have a clearer picture of their accounts.