According to CAPA analysis, Qantas subsidiary Jetstar is on track to surpass its parent company by becoming Australia’s largest international carrier
SYDNEY- Jetstar Airways is on the verge of overtaking parent Qantas as the bigger airline by international passenger numbers as the LCC subsidiary continues its relentless growth in both the Australian domestic and international markets.
The latest figures issued by Qantas Group for November 2012 show the stark contrast in the fortunes of the two stable brands. On international routes, Jetstar put in double digit-growth while Qantas continues to fall away. If the current trend continues, Jetstar could overtake Qantas within six months as the biggest carrier by passengers carried to and from Australia.
At the group level Qantas’ passenger and capacity numbers look relatively healthy. Total passengers carried in November 2012 was up 6.4% to 4.12 million. Total passenger numbers were up 4.1% for the first five months of the fiscal year ending 30-Jun-2013 to 20.49 million.
Growth in demand at the group, measured as RPKs, was up a more subdued 1.3% for the month. Capacity, measured as ASKs, gained 0.7% in Nov-2012 and 2% for the financial year-to-date.
However details show that Jetstar Airways (excluding Asian affiliates and joint ventures which make up the Jetstar Group), taking great strides on all measures domestically and internationally while the Qantas premium brand works its way through its restructuring programme and is engaged in a fight for more domestic market share, particularly the corporate sector.
The effects of Qantas’ struggle on its international network is obvious. Jetstar carried 425,000 international passengers in November 2012, up 17.1% from November 2011 levels, not far behind the 472,000 carried by Qantas, which was down 3.1%.
For the first five months of FY2013, Jetstar’s international traffic gained 13.8% to carry 2.15 million passengers while Qantas carried 2.39 million, down 4.9%. If this trend is maintained, Jetstar could overtake Qantas within six months as the group’s biggest international carrier by passengers’ numbers.
Qantas has been forced to withdraw international routes and re-allocated aircraft to defend its lucrative domestic market in the face of increased competition from Virgin Australia, and maintain its 65% market share it regards as optimal for overall performance.
Qantas International losses have been a drag on the group’s profits for over a decade. A restructure programme was unveiled in Aug-2012, which included shedding unprofitable long-haul routes and a far reaching alliance with Middle East carrier Emirates. The Emirates alliance, which was given preliminary approval by the Australian Competition and Consumer Commission on 20-Dec-2012, is expected to deliver AUD300 million (USD311 million) of benefits annually and puts the carrier turn-around strategy on track.
The Jetstar Group has been tasked to develop the Qantas Group’s Asian reach through its Singapore operation, especially Southeast Asia. Jetstar Airways deploys 17% of its seat capacity on international routes including 15 destinations in Asia as well as to Honolulu in the US state of Hawaii, according to Innovata data.
Southeast Asia accounts for the bulk of Jetstar’s international seat capacity. In the week of 17-Dec-2012 to 23-Dec-2012 Jetstar provided 37,098 seats to and from Southeast Asia, followed by Southwest Pacific with 19,269 seats, North Asia with 17,082 and North America (Hawaii) with 5,454. This excludes capacity provided by its Asian subsidiaries or affiliates.
(Source: CAPA)
Luc Citrinot a French national is a freelance journalist and consultant in tourism and air transport with over 20 years experience. Based in Paris and Bangkok, he works for various travel and air transport trade publications in Europe and Asia.
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