SINGAPORE: The announcement of Jetstar Asia’s closure has sparked discussions about the future of low-cost travel from Singapore. Set to cease operations on 31 July 2024, the airline’s exit is attributed to a combination of rising costs and fierce competition in the budget airline sector.
Rising Costs Behind the Closure
Jetstar Asia, a subsidiary of Australia’s Qantas Group, indicated that it has struggled with escalating operational costs, including fuel, airport fees, and maintenance. CEO Stephanie Tully noted significant increases in supplier costs—up to 200%—have altered the airline’s economic viability.
Impact on Fares and Flight Routes
- Analysts predict that the closure could lead to higher flight fares, particularly on popular routes to Bangkok, Kuala Lumpur, and Jakarta.
- Joshua Ng from Alton Aviation Consultancy highlighted that as Jetstar passengers shift to other airlines, prices may rise due to increased demand.
- Jetstar Asia provides unique links to four destinations, including Broome and Labuan Bajo, which may now lack direct flights from Singapore.
However, experts like Alfred Chua from FlightGlobal suggest that low-cost carriers (LCCs) like Scoot could fill the void left by Jetstar Asia, especially with new aircraft expected to join its fleet this year.
Broader Aviation Trends
Despite the impending closure, analysts suggest the aviation sector is generally still on an upward trajectory. With global demand for air travel rising—illustrated by a year-on-year increase of 10.8% in international travel—there’s a solid appetite for flights from Singapore.
V. Mathivaanan from Republic Polytechnic mentioned that other LCCs such as AirAsia could also step in to service routes previously travelled by Jetstar Asia. The competitive nature of LCCs should cushion potential impacts on travellers.
Changi Airport’s Future
Changi Airport aims to expand its city links, increasing from over 170 to more than 200 by the mid-2030s. Despite Jetstar Asia’s departure, Chua opines that the airport will continue to attract new airlines due to its status in the region.
The shift in operations may challenge the perception of Singapore as a budget airline-friendly destination, but many believe the demand and profitability for other airlines will keep the travel options vibrant.
Overall, while Jetstar Asia’s exit marks a significant shift in the Singapore aviation landscape, the remaining players in the market seem poised to adapt and continue providing options for budget-conscious travellers.