Jetstar Sisters Fly the Nest and Go their Separate Ways
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Jetstar Sisters Fly the Nest and Go their Separate Ways
Not sure what this article is getting at - I mean the shareholding structure's still remaining the same with QF having the largest single stake (of I think 49%?)
Jetstar sisters fly the nest and go their separate ways
Ven Sreenivasan
713 words
18 June 2008
Business Times Singapore
English
(c) 2008 Singapore Press Holdings Limited
(SINGAPORE) In what some industry insiders might interpret as a case of sibling rivalry, Singapore-based Jetstar Asia and its much bigger Melbourne-based sister Jetstar Australia have parted ways.
The split comes barely a year after the two Qantas-controlled budget carriers embarked on an ambitious and extensive commercial arrangement which saw them sharing a common website, embarking on joint commercial operations, fare-fixing, purchasing, call-centre coordination, joint marketing and offering travellers almost seamless interline connectivity across carriers from both airlines.
The first indication that the partnership could be unravelling emerged late last year when Jetstar pulled out of its wet-lease arrangement with its Singaporean sister, under which the latter provided jets and crew for its Singapore-Darwin-Cairns service. And earlier this year, Jetstar Australia started operating its own planes on the Darwin-Cairns route.
Both carriers were guarded in their response when asked why the break-up occurred.
'They (Jetstar Asia) are a Singapore-owned entity, and for local reasons, they have decided to be more independent in their operations,' was the response of Jetstar Australia's spokesman Simon Westway. 'But we will continue to work together in some areas, such as sharing the brand, its website, and also ensuring consistency of the product.'
Jetstar Asia's CEO Chong Phit Lian said the split reflected growing confidence within her group in its own ability to manage its own operations.
'Our intention has always been to think global, but act local,' she said. 'This move essentially reflects the confidence we have in our own talent and ability. It also gives us better cost advantage. Still, we will continue working with Jetstar Australia in many areas, including maintaining a common website.'
But the Australian entity will take back its Navatair distribution system, leaving Jetstar Asia to set up its own localised version. Jetstar Australia has also taken back three A320s originally headed for the Singapore fleet, but which were leased to Atlas airlines in Turkey over two years ago. This leaves Jetstar Asia with seven planes which serve 14 regional routes.
Also, Jetstar Asia's codeshare with Vietnam-based Jetstar Pacific Airlines has ended. Jetstar Australia bought an 18 per cent stake in the Vietnamese domestic budget carrier last year, and will control about 30 per cent by 2001.
Some industry insiders who are close to both sides say the parting of ways resulted from differences in strategies, operational priorities and visions.
For example, Jetstar Australia is said to have had reservations about the Singapore unit's decision to go ahead with bulk ticketing arrangements with the now defunct Hong Kong-based long haul carrier, Oasis.
Meanwhile, Jetstar Australia, with its fleet of 20 A320s and half a dozen A330-220s, has a vast network spanning Australasia, and recently launched long range flights to South-east Asia, Japan and Hawaii.
Jetstar Asia had a couple of turbulent years after taking to the skies in 2004, but in recent years has seen an improvement in operations under the leadership of Ms Chong. She recently told BT that her airline could chalk up its first set of profits this year.
Despite the split, parent Qantas still owns Jetstar Australia and controls the Singapore budget carrier group through its 49 per cent stake in Orangestar. And Jetstar Australia's chief executive Alan Joyce remains on the board of Jetstar Asia's holding company, Orangestar.
Qantas and its budget offshoots embarked on the commercial arrangement almost two years ago, soon after it bought up failing privately owned discount carrier Valuair, then merged it with the then-struggling Jetstar Asia under the Orangestar banner. The exercise also saw a huge capital injection of some $36 million into the group by its two controlling shareholders - Qantas and the Temasek group.
This came after the two Singapore-based budget carriers burnt some $100 million in their first few years of operations and saw three changes in CEOs in as many years.
But the 'merger' drew howls of protest from competitors like Singapore's Tiger Airways, which claimed it was anti-competitive.
Still, the move was approved by both the Australian Competition and Consumer Commission (ACCC) in 2006, and the Competition Commission of Singapore last year.
Document STBT000020080618e46i0000g
Jetstar sisters fly the nest and go their separate ways
Ven Sreenivasan
713 words
18 June 2008
Business Times Singapore
English
(c) 2008 Singapore Press Holdings Limited
(SINGAPORE) In what some industry insiders might interpret as a case of sibling rivalry, Singapore-based Jetstar Asia and its much bigger Melbourne-based sister Jetstar Australia have parted ways.
The split comes barely a year after the two Qantas-controlled budget carriers embarked on an ambitious and extensive commercial arrangement which saw them sharing a common website, embarking on joint commercial operations, fare-fixing, purchasing, call-centre coordination, joint marketing and offering travellers almost seamless interline connectivity across carriers from both airlines.
The first indication that the partnership could be unravelling emerged late last year when Jetstar pulled out of its wet-lease arrangement with its Singaporean sister, under which the latter provided jets and crew for its Singapore-Darwin-Cairns service. And earlier this year, Jetstar Australia started operating its own planes on the Darwin-Cairns route.
Both carriers were guarded in their response when asked why the break-up occurred.
'They (Jetstar Asia) are a Singapore-owned entity, and for local reasons, they have decided to be more independent in their operations,' was the response of Jetstar Australia's spokesman Simon Westway. 'But we will continue to work together in some areas, such as sharing the brand, its website, and also ensuring consistency of the product.'
Jetstar Asia's CEO Chong Phit Lian said the split reflected growing confidence within her group in its own ability to manage its own operations.
'Our intention has always been to think global, but act local,' she said. 'This move essentially reflects the confidence we have in our own talent and ability. It also gives us better cost advantage. Still, we will continue working with Jetstar Australia in many areas, including maintaining a common website.'
But the Australian entity will take back its Navatair distribution system, leaving Jetstar Asia to set up its own localised version. Jetstar Australia has also taken back three A320s originally headed for the Singapore fleet, but which were leased to Atlas airlines in Turkey over two years ago. This leaves Jetstar Asia with seven planes which serve 14 regional routes.
Also, Jetstar Asia's codeshare with Vietnam-based Jetstar Pacific Airlines has ended. Jetstar Australia bought an 18 per cent stake in the Vietnamese domestic budget carrier last year, and will control about 30 per cent by 2001.
Some industry insiders who are close to both sides say the parting of ways resulted from differences in strategies, operational priorities and visions.
For example, Jetstar Australia is said to have had reservations about the Singapore unit's decision to go ahead with bulk ticketing arrangements with the now defunct Hong Kong-based long haul carrier, Oasis.
Meanwhile, Jetstar Australia, with its fleet of 20 A320s and half a dozen A330-220s, has a vast network spanning Australasia, and recently launched long range flights to South-east Asia, Japan and Hawaii.
Jetstar Asia had a couple of turbulent years after taking to the skies in 2004, but in recent years has seen an improvement in operations under the leadership of Ms Chong. She recently told BT that her airline could chalk up its first set of profits this year.
Despite the split, parent Qantas still owns Jetstar Australia and controls the Singapore budget carrier group through its 49 per cent stake in Orangestar. And Jetstar Australia's chief executive Alan Joyce remains on the board of Jetstar Asia's holding company, Orangestar.
Qantas and its budget offshoots embarked on the commercial arrangement almost two years ago, soon after it bought up failing privately owned discount carrier Valuair, then merged it with the then-struggling Jetstar Asia under the Orangestar banner. The exercise also saw a huge capital injection of some $36 million into the group by its two controlling shareholders - Qantas and the Temasek group.
This came after the two Singapore-based budget carriers burnt some $100 million in their first few years of operations and saw three changes in CEOs in as many years.
But the 'merger' drew howls of protest from competitors like Singapore's Tiger Airways, which claimed it was anti-competitive.
Still, the move was approved by both the Australian Competition and Consumer Commission (ACCC) in 2006, and the Competition Commission of Singapore last year.
Document STBT000020080618e46i0000g
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Maybe this goes some way into explaining the Jetstar brand move into Vietnam.
Things have been pretty rocky between the partners of Jetstar Asia for some time, so a not unexpected outcome.
Things have been pretty rocky between the partners of Jetstar Asia for some time, so a not unexpected outcome.
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Vietnam Airlines fly MEL - SGN -HAN 3,4 or 5 times a week (I can't remember), but they are always 90% full or more. They fly B777 and I don't know what IFE is included, but I guess you could always check their website.
I haven't checked fares, but I would say to go direct with VN would only be $100-200 more, than the slog with JQ. With the QF group and fuel surcharges VN may even be cheaper. And also quicker.
Even on staff travel if I have to go through SYD to get a QF flight, I'll most likely go with the carrier who flys direct ex MEL. I do like Jcls when possible, but on staff travel it is such a hassle to go somewhere through SYD. Coming home through SYD is a lot easier than departing.
I haven't checked fares, but I would say to go direct with VN would only be $100-200 more, than the slog with JQ. With the QF group and fuel surcharges VN may even be cheaper. And also quicker.
Even on staff travel if I have to go through SYD to get a QF flight, I'll most likely go with the carrier who flys direct ex MEL. I do like Jcls when possible, but on staff travel it is such a hassle to go somewhere through SYD. Coming home through SYD is a lot easier than departing.
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Owen,
Mate J* Vietnam operate HCM-Hanoi (BL- flight code). So all you need do is go YMML-YSSY-VVTS-VVNB.
But the last bit won't be 100% Australian as QF is a minority shareholder (but that's also true of the SG-HN leg in your example).
Not great but it cuts out one leg and one airport wait.
Mate J* Vietnam operate HCM-Hanoi (BL- flight code). So all you need do is go YMML-YSSY-VVTS-VVNB.
But the last bit won't be 100% Australian as QF is a minority shareholder (but that's also true of the SG-HN leg in your example).
Not great but it cuts out one leg and one airport wait.
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Owen
What you and alot of people dont realize, is that QF/J* WILL be doing these non-stop sectors in the future. Have a guess why they are'nt doing them now? They are out there trying exceptionally hard to get their hands on more widebodies as soon as possible! There are very few available. The 380/787 delays have thrown them a huge curve ball, you dont have the right airframes, you cant do the runs! duh!
What you and alot of people dont realize, is that QF/J* WILL be doing these non-stop sectors in the future. Have a guess why they are'nt doing them now? They are out there trying exceptionally hard to get their hands on more widebodies as soon as possible! There are very few available. The 380/787 delays have thrown them a huge curve ball, you dont have the right airframes, you cant do the runs! duh!
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I can't help but ask what Jetstar Asia' next step will be.
To go it alone with their small fleet and lack of other partnerships seems a hard road to take. Even if you differ with you business partners, given the benefits of their brand and network, why would you go it alone?
It also seems interesting how Temasek, who has a large stake in Jetstar Asia, could strategically have continued to balance this (1) with their interest in Tiger when Tiger OZ is so clearly targetting Jetstar and (2) the fact that Jetstar is part of the Qantas group and Temasek is key to SIA and Silkair.
I can't help but ask if this is part of a bigger picture in the play by Qantas Grp, SIA/Tiger and Air Asia to become the pan Asia Pacific carriers.
To go it alone with their small fleet and lack of other partnerships seems a hard road to take. Even if you differ with you business partners, given the benefits of their brand and network, why would you go it alone?
It also seems interesting how Temasek, who has a large stake in Jetstar Asia, could strategically have continued to balance this (1) with their interest in Tiger when Tiger OZ is so clearly targetting Jetstar and (2) the fact that Jetstar is part of the Qantas group and Temasek is key to SIA and Silkair.
I can't help but ask if this is part of a bigger picture in the play by Qantas Grp, SIA/Tiger and Air Asia to become the pan Asia Pacific carriers.
Last edited by windytown; 19th Jun 2008 at 11:05.
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Oh Temasek would have no problems in balancing its stake in Jetstar Asia with all the other Singapore-based airlines it has a stake in
Of the 3 Telcos in Singapore,Temasek owns
52% of Singtel, the largest telco
56% of Singapore Technologies Telemedia which has a 54% stake in Starhub, the second largest telco
21% of Keppel Corporation which owns 21% of Mobile One Limited, the third largest telco
All 3 compete very fiercely.
Of the 3 Telcos in Singapore,Temasek owns
52% of Singtel, the largest telco
56% of Singapore Technologies Telemedia which has a 54% stake in Starhub, the second largest telco
21% of Keppel Corporation which owns 21% of Mobile One Limited, the third largest telco
All 3 compete very fiercely.
Jetstar Asia aims for mainland China
SINGAPORE, Aug 25, 2009 (AFP) - Singapore-based budget carrier Jetstar Asia on Tuesday announced it would expand capacity and planned to begin flights to mainland China in December.
"Mainland China has immense potential for Jetstar's low fares offering and the broader Jetstar group network destinations," said company chief executive Chong Phit Lian.
"China is a clear focus of future growth and with our expanding fleet in 2010, we are in the stage of actively assessing future potential growth," she said.
As well as aiming to expand into China, Jetstar will from October increase flights to Manila from seven to 10 per week, adding it will also run three daily trips instead of the current two to Bangkok from next month.
And from December the firm will resume its flights to Phuket, a route it terminated in March last year partly due to escalating oil prices.
Jetstar Asia said it would take delivery of three Airbus A320 jets over the next 12 months, which will boost its fleet capacity by 46 percent.
The firm is 49 percent-owned by Australian flag carrier Qantas and flies to some of Asia's most popular destinations including Macau, Hong Kong and Ho Chi Minh City from its regional base in Singapore.
Source : AFP
"Mainland China has immense potential for Jetstar's low fares offering and the broader Jetstar group network destinations," said company chief executive Chong Phit Lian.
"China is a clear focus of future growth and with our expanding fleet in 2010, we are in the stage of actively assessing future potential growth," she said.
As well as aiming to expand into China, Jetstar will from October increase flights to Manila from seven to 10 per week, adding it will also run three daily trips instead of the current two to Bangkok from next month.
And from December the firm will resume its flights to Phuket, a route it terminated in March last year partly due to escalating oil prices.
Jetstar Asia said it would take delivery of three Airbus A320 jets over the next 12 months, which will boost its fleet capacity by 46 percent.
The firm is 49 percent-owned by Australian flag carrier Qantas and flies to some of Asia's most popular destinations including Macau, Hong Kong and Ho Chi Minh City from its regional base in Singapore.
Source : AFP
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I think its worth remembering that since this thread started that Tamasek no longer has equity in Jetstar Asia and that the new owner Newstar is owned by Qantas and a player with strong Qantas ties.
Hence this move comes after the separation of the Jetstar sister had been resolved by a change in ownership which leaves the Qantas group effectively controlling Jetstar Asia and Jetstar having entirely separate ownership to Tiger.
This makes it easier to grow Jetstar Asia in competition with Tiger and thus make JQ a significant AsiaPacific player, a strategy which was evident in the material released with the annual results. The combined situation also allows for OZ based Jetstar planes to feed passenger to Jetstar Asia in Singapore.
Hence this move comes after the separation of the Jetstar sister had been resolved by a change in ownership which leaves the Qantas group effectively controlling Jetstar Asia and Jetstar having entirely separate ownership to Tiger.
This makes it easier to grow Jetstar Asia in competition with Tiger and thus make JQ a significant AsiaPacific player, a strategy which was evident in the material released with the annual results. The combined situation also allows for OZ based Jetstar planes to feed passenger to Jetstar Asia in Singapore.
