Jetstar aims to fly above the fray
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Jetstar aims to fly above the fray
channelnews.asia
Jetstar aims to fly above the fray
By Shobha Tsering Bhalla, TODAY
SINGAPORE : Jetstar Asia, which took delivery of its first aircraft on Wednesday, is looking at introducing in-flight entertainment features amid intensifying competition in the low-cost segment of the industry.
The latest entrant into Singapore's increasingly-crowded skies which had started off as a strictly "no frills" airline at its launch two months ago may now be adding electronic in-flight entertainment on a "pay-per-use" basis said its chief operating officer Con Korfiatis.
"The fact that people have to buy food on flight does not mean there will be no entertainment, at least on our longer routes. We're not sure what form this entertainment will take but electronic entertainment is a possibility," he told Today.
If this happens, Jetstar Asia will be the first budget airline in South-east Asia to offer in-flight entertainment - a tool that experts hail as the "big differentiator" in an industry where ticket prices are roughly similar across the board.
Interestingly, Virgin Blue - an archrival of Jetstar Asia's sister concern in Australia - has already thrown down the gauntlet by announcing it will introduce live television services from the middle of next year.
Virgin Blue plans to charge a fee of A$5 ($6.37) for the service which can be activated with a credit card and provides unlimited use on a one-way flight.
In-flight entertainment is the new buzzword among budget airlines anxious to get an edge over the competition.
Still, perks like in-flight entertainment are ephemeral attempts to create differentiation, say experts and they go against the fundamental trend in airline travel - the commoditisation of airplane seats.
But that has not stopped other budget airlines like JetBlue Airways and the low fare arms of United and Delta - among others - from offering in-flight entertainment.
In Europe, in-flight entertainment is taking a new twist with Ryannair planning to offer in-flight gambling.
The Dublin-based budget carrier - Europe's largest - has just started offering in-flight entertainment on a pay-per-use model.
The driving force behind this change of heart among budget carriers is increasing airline competition and consumer demand, say experts.
Earlier this year, even the United States' most successful budget airline - Southwest - was reportedly toying with the idea of introducing in-flight entertainment.
Some industry watchers fear that budget airlines like Southwest, which have significant cost advantages over their full-service counterparts, may be sacrificing their advantages by providing in-flight entertainment.
That goes for Jetstar Asia too. Just how competitive can Jetstar Asia keep its fares if it introduces in-flight entertainment?
Very competitive, said Mr Korfiatis.
Adding in-flight entertainment would not be "at the cost of our low pricing structure".
"What we'll never do is put frills on our aircraft that would have an (adverse) impact on our fares. Some other guys are looking to giving it free but that would affect their fare structure. We don't plan to do that. Our view is that at the end of the day, the consumer won't be prepared to pay a significant amount more for entertainment. So, it would be on a user-pay basis and structured," he said.
In fact, if Jetstar Asia goes for pay-per-use entertainment it might actually reap attractive revenues.
Ryannair, which is introducing in-flight entertainment on five of its planes this month on a pilot run, expects the service to lift revenues by at least euro 14 million ($30 million) in the first year.
The airline needs only 3 per cent of its passengers to use the portable entertainment units to cover its costs.
In-flight entertainment or no, Mr Korfiatis stressed that fares would be low and readily available.
"We will be providing very low everyday fares year-round instead of just a few very gimmicky low fares that have very limited availability and more of an irritation factor."
The need to provide entertainment on board may be crucial to Jetstar's business plan as its routes are believed to include destinations that are an hour longer than those covered by most Asian budget carriers which fly within a four-hour radius.
Mr Korfiatis said Jetstar Asia was looking at routes to Shanghai, China, Mumbai, India, Vietnam, Taiwan, Perth and Darwin in Australia, and anything in between.
The airline expects to start commercial flights in mid-December - two months after Singapore Airlines'-owned Tiger Airways took off, and six months after Singapore-based Valuair.
It has appointed Red Card as its advertising agency and will be launching a regional advertising and branding campaign soon.
The low-cost Asian carrier is a partnership between Temasek Holdings, Qantas Airways and two Singaporean investors, with Qantas holding a 49-per-cent share. -TODAY
=======================================
Jetstar aims to fly above the fray
By Shobha Tsering Bhalla, TODAY
SINGAPORE : Jetstar Asia, which took delivery of its first aircraft on Wednesday, is looking at introducing in-flight entertainment features amid intensifying competition in the low-cost segment of the industry.
The latest entrant into Singapore's increasingly-crowded skies which had started off as a strictly "no frills" airline at its launch two months ago may now be adding electronic in-flight entertainment on a "pay-per-use" basis said its chief operating officer Con Korfiatis.
"The fact that people have to buy food on flight does not mean there will be no entertainment, at least on our longer routes. We're not sure what form this entertainment will take but electronic entertainment is a possibility," he told Today.
If this happens, Jetstar Asia will be the first budget airline in South-east Asia to offer in-flight entertainment - a tool that experts hail as the "big differentiator" in an industry where ticket prices are roughly similar across the board.
Interestingly, Virgin Blue - an archrival of Jetstar Asia's sister concern in Australia - has already thrown down the gauntlet by announcing it will introduce live television services from the middle of next year.
Virgin Blue plans to charge a fee of A$5 ($6.37) for the service which can be activated with a credit card and provides unlimited use on a one-way flight.
In-flight entertainment is the new buzzword among budget airlines anxious to get an edge over the competition.
Still, perks like in-flight entertainment are ephemeral attempts to create differentiation, say experts and they go against the fundamental trend in airline travel - the commoditisation of airplane seats.
But that has not stopped other budget airlines like JetBlue Airways and the low fare arms of United and Delta - among others - from offering in-flight entertainment.
In Europe, in-flight entertainment is taking a new twist with Ryannair planning to offer in-flight gambling.
The Dublin-based budget carrier - Europe's largest - has just started offering in-flight entertainment on a pay-per-use model.
The driving force behind this change of heart among budget carriers is increasing airline competition and consumer demand, say experts.
Earlier this year, even the United States' most successful budget airline - Southwest - was reportedly toying with the idea of introducing in-flight entertainment.
Some industry watchers fear that budget airlines like Southwest, which have significant cost advantages over their full-service counterparts, may be sacrificing their advantages by providing in-flight entertainment.
That goes for Jetstar Asia too. Just how competitive can Jetstar Asia keep its fares if it introduces in-flight entertainment?
Very competitive, said Mr Korfiatis.
Adding in-flight entertainment would not be "at the cost of our low pricing structure".
"What we'll never do is put frills on our aircraft that would have an (adverse) impact on our fares. Some other guys are looking to giving it free but that would affect their fare structure. We don't plan to do that. Our view is that at the end of the day, the consumer won't be prepared to pay a significant amount more for entertainment. So, it would be on a user-pay basis and structured," he said.
In fact, if Jetstar Asia goes for pay-per-use entertainment it might actually reap attractive revenues.
Ryannair, which is introducing in-flight entertainment on five of its planes this month on a pilot run, expects the service to lift revenues by at least euro 14 million ($30 million) in the first year.
The airline needs only 3 per cent of its passengers to use the portable entertainment units to cover its costs.
In-flight entertainment or no, Mr Korfiatis stressed that fares would be low and readily available.
"We will be providing very low everyday fares year-round instead of just a few very gimmicky low fares that have very limited availability and more of an irritation factor."
The need to provide entertainment on board may be crucial to Jetstar's business plan as its routes are believed to include destinations that are an hour longer than those covered by most Asian budget carriers which fly within a four-hour radius.
Mr Korfiatis said Jetstar Asia was looking at routes to Shanghai, China, Mumbai, India, Vietnam, Taiwan, Perth and Darwin in Australia, and anything in between.
The airline expects to start commercial flights in mid-December - two months after Singapore Airlines'-owned Tiger Airways took off, and six months after Singapore-based Valuair.
It has appointed Red Card as its advertising agency and will be launching a regional advertising and branding campaign soon.
The low-cost Asian carrier is a partnership between Temasek Holdings, Qantas Airways and two Singaporean investors, with Qantas holding a 49-per-cent share. -TODAY
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