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Time of India
a day ago
- Business
- Time of India
Southeast Asia Budget Airlines: Southeast Asia's Budget Airlines Push for Growth Amidst Rising Costs and Competition, ET TravelWorld
Advt Advt Join the community of 2M+ industry professionals. Subscribe to Newsletter to get latest insights & analysis in your inbox. All about ETTravelWorld industry right on your smartphone! Download the ETTravelWorld App and get the Realtime updates and Save your favourite articles. Southeast Asia's biggest budget airlines are pursuing a bruising capacity expansion race despite rising cost pressures that are squeezing profitability and led Qantas Airways to shut down Singapore-based offshoot Jetstar carriers have proliferated in Asia in the past two decades as disposable incomes rise, supported by robust travel demand from Chinese for air travel in Asia is expected to grow faster than other regions in the next few decades and carriers like Vietnam's VietJet Aviation and Malaysia-headquartered AirAsia are to buy more planes to add to their already large orderbooks as they seek to gain market margins are thinner than in other regions. The International Air Transport Association (IATA), an airline industry body, this year expects Asia-Pacific airlines to make a net profit margin of 1.9 per cent, compared with a global average of 3.7 per across Asia have largely restored capacity since the pandemic, which has intensified competition, especially for price-sensitive budget travellers, and pulled airfares down from recent high airfares in Asia dropped 12 per cent in 2024 from 2023, ForwardKeys data shows. AirAsia, the region's largest budget carrier, reported a 9 per cent decline in average airfares in the first quarter as it added capacity and passed savings from lower fuel prices onto its to challenges for airlines, costs such as labour and airport charges are also rising, while a shortage of new planes is driving up leasing and maintenance shifting landscape prompted Australia's Qantas to announce last week that its loss-making low-cost intra-Asia subsidiary Jetstar Asia would shut down by the end of July after two decades of Asia said it had seen "really high cost increases" at its Singapore base, including double-digit rises in fuel, airport fees, ground handling and security charges."It is a very thin buffer, and with margins this low, any cost increase can impact an airline's viability," said IATA Asia-Pacific Vice President Sheldon Hee, adding that operating costs were escalating in the data firm OAG in a February white paper said Asia-Pacific was the world's most competitive aviation market, with airfares driven down by rapid capacity expansion "perhaps to a point where profits are compromised"."Balancing supply to demand and costs to revenue have never been more critical," the report said of the region's Asia has an unusually high concentration of international budget flights. Around two-thirds of international seats within Southeast Asia so far this year were on budget carriers, compared to about one-third of international seats globally, CAPA Centre for Aviation data took the option to move Jetstar Asia's aircraft to more cost-efficient operations in Australia and New Zealand rather than continue to lose money, analysts operators in Southeast Asia were struggling for profits amid fierce competition even before the pandemic and now there is the added factor of higher costs, said Asia-based independent aviation analyst Brendan carriers offer bargain fares by driving operating costs as low as possible. Large fleets of one aircraft type drive efficiencies of Asia was much smaller than local rivals, with only 13 aircraft. As of March 31, Singapore Airlines' budget offshoot Scoot had 53 planes, AirAsia had 225 and VietJet had 117, including its Thai arm. Low-cost Philippine carrier Cebu Pacific had four are adding more planes to their fleets this year and further into the on Tuesday signed a provisional deal to buy up to another 150 single-aisle Airbus planes at the Paris Airshow, in a move it said was just the beginning as the airline pursues ambitious deal comes weeks after it ordered 20 A330neo wide-body planes, alongside an outstanding order for 200 Boeing 737 MAX which has an existing orderbook of at least 350 planes, is also in talks to buy 50 to 70 long-range single-aisle jetliners, and 100 regional jets that could allow it to expand to more destinations, its CEO Tony Fernandes said on Wednesday."At the end of the day, it is go big or go home," said Subhas Menon, director general of the Association of Asia Pacific Airlines.
Time of India
a day ago
- Business
- Time of India
Southeast Asia Budget Airlines: Southeast Asia's Budget Airlines Push for Growth Amidst Rising Costs and Competition, ET Infra
Advt Advt Go big or go home Southeast Asia's biggest budget airlines are pursuing a bruising capacity expansion race despite rising cost pressures that are squeezing profitability and led Qantas Airways to shut down Singapore-based offshoot Jetstar carriers have proliferated in Asia in the past two decades as disposable incomes rise, supported by robust travel demand from Chinese for air travel in Asia is expected to grow faster than other regions in the next few decades and carriers like Vietnam's VietJet Aviation and Malaysia-headquartered AirAsia are to buy more planes to add to their already large orderbooks as they seek to gain market margins are thinner than in other regions. The International Air Transport Association (IATA), an airline industry body, this year expects Asia-Pacific airlines to make a net profit margin of 1.9 per cent, compared with a global average of 3.7 per across Asia have largely restored capacity since the pandemic, which has intensified competition, especially for price-sensitive budget travellers, and pulled airfares down from recent high airfares in Asia dropped 12 per cent in 2024 from 2023, ForwardKeys data shows. AirAsia, the region's largest budget carrier, reported a 9 per cent decline in average airfares in the first quarter as it added capacity and passed savings from lower fuel prices onto its to challenges for airlines, costs such as labour and airport charges are also rising, while a shortage of new planes is driving up leasing and maintenance shifting landscape prompted Australia's Qantas to announce last week that its loss-making low-cost intra-Asia subsidiary Jetstar Asia would shut down by the end of July after two decades of Asia said it had seen "really high cost increases" at its Singapore base, including double-digit rises in fuel, airport fees, ground handling and security charges."It is a very thin buffer, and with margins this low, any cost increase can impact an airline's viability," said IATA Asia-Pacific Vice President Sheldon Hee, adding that operating costs were escalating in the data firm OAG in a February white paper said Asia-Pacific was the world's most competitive aviation market, with airfares driven down by rapid capacity expansion "perhaps to a point where profits are compromised"."Balancing supply to demand and costs to revenue have never been more critical," the report said of the region's Asia has an unusually high concentration of international budget flights. Around two-thirds of international seats within Southeast Asia so far this year were on budget carriers, compared to about one-third of international seats globally, CAPA Centre for Aviation data took the option to move Jetstar Asia's aircraft to more cost-efficient operations in Australia and New Zealand rather than continue to lose money, analysts operators in Southeast Asia were struggling for profits amid fierce competition even before the pandemic and now there is the added factor of higher costs, said Asia-based independent aviation analyst Brendan carriers offer bargain fares by driving operating costs as low as possible. Large fleets of one aircraft type drive efficiencies of Asia was much smaller than local rivals, with only 13 aircraft. As of March 31, Singapore Airlines' budget offshoot Scoot had 53 planes, AirAsia had 225 and VietJet had 117, including its Thai arm. Low-cost Philippine carrier Cebu Pacific had four are adding more planes to their fleets this year and further into the on Tuesday signed a provisional deal to buy up to another 150 single-aisle Airbus planes at the Paris Airshow, in a move it said was just the beginning as the airline pursues ambitious deal comes weeks after it ordered 20 A330neo wide-body planes, alongside an outstanding order for 200 Boeing 737 MAX which has an existing orderbook of at least 350 planes, is also in talks to buy 50 to 70 long-range single-aisle jetliners, and 100 regional jets that could allow it to expand to more destinations, its CEO Tony Fernandes said on Wednesday."At the end of the day, it is go big or go home," said Subhas Menon, director general of the Association of Asia Pacific Airlines.
Business Times
a day ago
- Business
- Business Times
South-east Asia's budget airlines bet on travel demand, despite competition woes
[SEOUL] South-east Asia's biggest budget airlines are pursuing a bruising capacity expansion race despite rising cost pressures that are squeezing profitability and led Qantas Airways to shut down Singapore-based offshoot Jetstar Asia. Low-cost carriers have proliferated in Asia in the past two decades as disposable incomes rise, supported by robust travel demand from Chinese tourists. Demand for air travel in Asia is expected to grow faster than in other regions in the next few decades, and carriers such as Vietnam's VietJet Aviation and Malaysia-headquartered AirAsia are to buy more planes to add to their already large order books as they seek to gain market share. But margins are thinner than in other regions. The International Air Transport Association (Iata), an airline industry body, this year expects Asia-Pacific airlines to make a net profit margin of 1.9 per cent, compared with a global average of 3.7 per cent. Airlines across Asia have largely restored capacity since the pandemic, which has intensified competition, especially for price-sensitive budget travellers, and pulled airfares down from recent high levels. International airfares in Asia dropped 12 per cent in 2024 from 2023, ForwardKeys data shows. AirAsia, the region's largest budget carrier, reported a 9 per cent decline in average airfares in the first quarter as it added capacity and passed savings from lower fuel prices onto its customers. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up Adding to challenges for airlines, costs such as labour and airport charges are also rising, while a shortage of new planes is driving up leasing and maintenance fees. This shifting landscape prompted Australia's Qantas to announce last week that its loss-making low-cost intra-Asia subsidiary Jetstar Asia would shut down by the end of July after two decades of operations. Jetstar Asia said it had seen 'really high cost increases' at its Singapore base, including double-digit rises in fuel, airport fees, ground handling and security charges. 'It is a very thin buffer, and with margins this low, any cost increase can impact an airline's viability,' said Iata Asia-Pacific vice-president Sheldon Hee, adding that operating costs were escalating in the region. Aviation data firm OAG in a February white paper, said that Asia-Pacific was the world's most competitive aviation market, with airfares driven down by rapid capacity expansion 'perhaps to a point where profits are compromised'. 'Balancing supply to demand and costs to revenue have never been more critical,' the report said of the region's airlines. 'Go big or go home' South-east Asia has an unusually high concentration of international budget flights. Around two-thirds of international seats within South-east Asia so far this year were on budget carriers, compared to about one-third of international seats globally, Capa Centre for Aviation data shows. Qantas took the option to move Jetstar Asia's aircraft to more cost-efficient operations in Australia and New Zealand rather than continue to lose money, analysts say. Budget operators in South-east Asia were struggling for profits amid fierce competition even before the pandemic and now there is the added factor of higher costs, said Asia-based independent aviation analyst Brendan Sobie. Low-cost carriers offer bargain fares by driving operating costs as low as possible. Large fleets of one aircraft type drive efficiencies of scale. Jetstar Asia was much smaller than local rivals, with only 13 aircraft. As at Mar 31, Singapore Airlines' budget offshoot Scoot had 53 planes, AirAsia had 225 and VietJet had 117, including its Thai arm. Low-cost Philippine carrier Cebu Pacific had 99. All four are adding more planes to their fleets this year and further into the future. VietJet on Tuesday (Jun 17) signed a provisional deal to buy up to another 150 single-aisle Airbus planes at the Paris Airshow, in a move it said was just the beginning as the airline pursues ambitious growth. The deal comes weeks after it ordered 20 A330neo wide-body planes, alongside an outstanding order for 200 Boeing 737 MAX jets. AirAsia, which has an existing orderbook of at least 350 planes, is also in talks to buy 50 to 70 long-range single-aisle jetliners, and 100 regional jets that could allow it to expand to more destinations, its CEO Tony Fernandes said on Wednesday. 'At the end of the day, it is go big or go home,' said Subhas Menon, director general of the Association of Asia-Pacific Airlines. REUTERS
New Straits Times
2 days ago
- Business
- New Straits Times
Southeast Asia's budget airlines bet on travel demand, despite competition woes
SEOUL: Southeast Asia's biggest budget airlines are pursuing a bruising capacity expansion race despite rising cost pressures that are squeezing profitability and led Qantas Airways to shut down Singapore-based offshoot Jetstar Asia. Low-cost carriers have proliferated in Asia over the past two decades as disposable incomes rise, supported by robust travel demand from Chinese tourists. Demand for air travel in Asia is expected to grow faster than other regions in the coming decades, and carriers like Vietnam's VietJet Aviation and Malaysia-headquartered AirAsia are set to buy more planes to add to their already large orderbooks as they seek to gain market share. But margins are thinner than in other regions. The International Air Transport Association (IATA), an airline industry body, this year expects Asia-Pacific airlines to make a net profit margin of 1.90 per cent, compared with a global average of 3.70 per cent. Airlines across Asia have largely restored capacity since the pandemic, which has intensified competition, especially for price-sensitive budget travellers, and pulled airfares down from recent high levels. International airfares in Asia dropped 12.00 per cent in 2024 from 2023, ForwardKeys data shows. AirAsia, the region's largest budget carrier, reported a 9.00 per cent decline in average airfares in the first quarter as it added capacity and passed savings from lower fuel prices onto its customers. Adding to challenges for airlines, costs such as labour and airport charges are also rising, while a shortage of new planes is driving up leasing and maintenance fees. This shifting landscape prompted Australia's Qantas to announce last week that its loss-making low-cost intra-Asia subsidiary Jetstar Asia would shut down by the end of July after two decades of operations. Jetstar Asia said it had seen "really high cost increases" at its Singapore base, including double-digit rises in fuel, airport fees, ground handling and security charges. "It is a very thin buffer, and with margins this low, any cost increase can impact an airline's viability," said IATA Asia-Pacific Vice-President Sheldon Hee, adding that operating costs were escalating in the region. Aviation data firm OAG said in a February white paper that Asia-Pacific was the world's most competitive aviation market, with airfares driven down by rapid capacity expansion "perhaps to a point where profits are compromised". "Balancing supply to demand and costs to revenue have never been more critical," the report said of the region's airlines. 'GO BIG OR GO HOME' Southeast Asia has an unusually high concentration of international budget flights. Around two-thirds of international seats within Southeast Asia so far this year were on budget carriers, compared to about one-third of international seats globally, CAPA – Centre for Aviation data shows. Qantas took the option to move Jetstar Asia's aircraft to more cost-efficient operations in Australia and New Zealand rather than continue to lose money, analysts say. Budget operators in Southeast Asia were struggling for profits amid fierce competition even before the pandemic, and now there is the added factor of higher costs, said Asia-based independent aviation analyst Brendan Sobie. Low-cost carriers offer bargain fares by driving operating costs as low as possible. Large fleets of one aircraft type drive efficiencies of scale. Jetstar Asia was much smaller than local rivals, with only 13 aircraft. As of Mar 31, Singapore Airlines' budget offshoot Scoot had 53 planes, AirAsia had 225 and VietJet had 117, including its Thai arm. Low-cost Philippine carrier Cebu Pacific had 99. All four are adding more planes to their fleets this year and further into the future. VietJet on Tuesday signed a provisional deal to buy up to another 150 single-aisle Airbus planes at the Paris Airshow, in a move it said was just the beginning as the airline pursues ambitious growth. The deal comes weeks after it ordered 20 A330neo wide-body planes, alongside an outstanding order for 200 Boeing 737 MAX jets. AirAsia, which has an existing orderbook of at least 350 planes, is also in talks to buy 50 to 70 long-range single-aisle jetliners and 100 regional jets that could allow it to expand to more destinations, its CEO Tony Fernandes said on Wednesday. "At the end of the day, it is go big or go home," said Subhas Menon, Director-General of the Association of Asia Pacific Airlines.
Kuwait Times
11-06-2025
- Business
- Kuwait Times
Qantas Airways shutters Singapore-based Jetstar Asia on rising costs
SINGAPORE: Australia's Qantas Airways will close its Singapore-based budget airline Jetstar Asia, the group said on Wednesday, blaming rising supplier costs, high airport fees and strong regional competition. The shutdown of the 20-year-old airline next month will result in the loss of up to 500 jobs, a Qantas spokesperson said, and Jetstar Asia's fleet of 13 Airbus A320 planes will be redeployed to Australia and New Zealand. Airlines across Asia, including budget rivals like Singapore Airlines', Malaysia-headquartered AirAsia and Vietnam's VietJet Aviation, have restored and grown their capacity post-pandemic, intensifying competition between carriers and driving airfares down. Jetstar Asia, which operated 16 intra-Asia routes from Singapore's Changi Airport, has faced growing challenges in recent years and has been unable to deliver returns comparable to stronger-performing core markets within the Qantas group, the company said. The airline has seen 'really high cost increases' at its Singapore base, including double-digit rises in fuel, airport fees, ground handling and security charges, Jetstar Group CEO Stephanie Tully told reporters. Jetstar Asia, which Tully said reported profits in only six of its 20 years of operation, is expected to post an underlying loss of A$35 million ($22.76 million) before interest and tax in the financial year ending June 30. The airline said Jetstar Asia's closure would release up to A$500 million to be recycled into its core businesses based largely on the value of the 13 planes, including the ability to replace costly leased aircraft that Australia's Jetstar Airways is using domestically. Jetstar Asia will gradually reduce its schedule before closing on July 31, and customers on cancelled flights will be offered full refunds and moved onto other airlines where possible. Qantas said it would take a one-off financial hit of about A$175 million from Jetstar Asia's closure over two financial years. Qantas shares were trading about 1 percent lower. The group said on Wednesday it continues to see strong demand across its domestic and international businesses. Cost woes Tully said Jetstar Asia's cost base was hit particularly hard in the last 18 months to two years. Changi, the world's fourth-busiest airport by international passengers, is steadily raising charges from this year through 2030 to fund investments and higher operating costs. The airport in March 2023 moved Jetstar Asia's operations from Terminal 1 to Terminal 4, the only terminal not connected by train to the other terminals, despite the airline's objections. 'We think it has had an impact on the business,' Tully said. Changi said in a statement it was disappointed by Jetstar Asia's decision to exit Singapore but respected its commercial considerations. Jetstar Asia accounted for around 3 percent of the airport's passenger traffic last year. Changi said it would work with other airlines to fill capacity gaps, including on four routes that no other carrier currently operates. Australia, New Zealand focus International operations at Qantas' other budget carriers, Jetstar Airways and Japan-based Jetstar Japan, will not be affected, the airline said. Six of Jetstar Asia's 13 narrow-body aircraft will replace leased aircraft at Jetstar's Australian operations, while four will replace ageing planes Qantas uses to serve the mining industry. Two planes will be deployed to Jetstar in Australia and one in New Zealand to grow capacity and potentially launch new routes, the airline said, in a move that will create more than 100 local jobs. Employees losing jobs in Singapore will get redundancy benefits and support to find jobs within the Qantas group or other airlines. Singapore's biggest trade union, the National Trades Union Congress, said it was aware of the Jetstar Asia closure ahead of the announcement and was working with Singapore Airlines, the Civil Aviation Authority of Singapore and Changi Airport to find new employment opportunities for the airline's employees. Singapore Airlines said it had set up channels for Jetstar staff to expedite applications for employment within the airline group. - Reuters
