JetStar Asia gets its man


“We’ll get them in the end!” So Qantas chief executive Geoff Dixon told us a few weeks back, talking of JetStar Asia’s bid to absorb fellow Singaporean start-up Valuair. It seems that he was right. His low-cost subsidiary has indeed taken over its erstwhile competitor:

That should come as little surprise. Singapore’s low-cost market was clearly overcrowded and Valuair’s future was in question virtually from the get go. In any case, Temasek Holdings, Singapore’s investment national arm, owns stakes in both JetStar and rival Tiger Airways, as well, of course, as a majority in Singapore Airlines. They like to keep things in the family in Singapore. For its part, Valuair’s chairman was a former head of Singapore Airlines.

More interesting, was how bullish Geoff appeared, when we met up up with him, on the prospects of spreading the JetStar Asia franchise across other parts of the region, again partnering with a local (maybe government?) partner. Lead candidates would seem to be the likes of Malaysia, Indonesia and the Philippines, with potentially large local markets.

If low-cost follows the same trajectory in Asia-Pacific as it has in North America and Europe then we should expect a dash for growth, followed by the emergence of just two or three lead players. In Asia that game is still wide open, but the smart money would for one of those positions must be on Air Asia, which as Tony Fernandes points out has the lowest seat unit costs of any carrier on the planet. Seems as if Qantas may be angling to be up there too.

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