ANALYSIS: Jetstar refocuses long-haul network on Australia

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Jetstar's latest adjustment to its widebody network demonstrates how it is reorientating towards its strength in outbound leisure travel from Australia.

The budget carrier will cut services from Singapore to Osaka on 1 November and Singapore to Beijing on 30 November. Both routes are flown by the Australian carrier using fifth-freedom rights, rather than its Singaporean affiliate Jetstar Asia.

While Singapore-Beijing was expected to be a boom route for the carrier, it seems to have made little impact at all. Jetstar only operates thrice weekly services on the route, compared to 26 from Singapore Airlines and 14 from Air China, placing it at a major disadvantage in relation to the two flag-carriers.

Interestingly, Jetstar's withdrawal from Beijing will see the Qantas Group lose exposure to the Chinese capital city. Qantas has focused its China services on Shanghai and codeshares on connecting services with partner China Eastern Airlines to Beijing as well as on its flights to Australia.

Source: FlightMaps Analytics

On the Osaka route, Jetstar's thrice weekly services pale compared to SIA's 14 weekly services. That includes four services that are operated with A380s, giving the Star Alliance carrier the lion's share of capacity.

Source: FlightMaps Analytics

However, Jetstar Asia will continue to fly from Singapore to Osaka via Taipei 14 times weekly and four times weekly via Manila.

With A330 capacity freed up from those routes, the airline will instead launch a direct Melbourne-Phuket service from 14 December. Initially, the service will operate twice weekly, with an additional frequency added from March 2014. This will complement its six-times weekly services from Sydney to Phuket.

"Phuket is a very popular destination for Australian travellers," a spokesman for the carrier tells Flightglobal Pro. "We saw a lot of Victorian customers booking flights to Phuket via Sydney and Singapore and decided there was enough demand to warrant a direct service."

The carrier will also add a seasonal frequency to its Melbourne-Honolulu route from 19 December. Jetstar is the sole nonstop operator on the route, although Hawaiian Airlines offers connections from Melbourne to its Sydney service through partner Virgin Australia.

Adding the nonstop Melbourne-Phuket services to its network puts Jetstar at a distinct advantage compared to its Asian competitors, such as AirAsia X, which offer attractively-priced connections through their hubs.

It will also help to further cement Jetstar's dominant position in the long-haul, low-cost market from Australia. Despite Scoot and AirAsia's best efforts, FlightMaps Analytics data shows that Jetstar has the largest share of seats from Australia of all three carriers - 57% compared to 34.5% from AirAsia X and 9.4% from Scoot in September 2013.

That advantage will grow soon as Jetstar prepares to take delivery of its first Boeing 787-8 in September. Ascend shows that it will take delivery of two more by the end of the year. That will be followed by six in 2014 and the remaining five in 2015.

The airline intends to initially use the aircraft on domestic and some regional international routes for crews to gain experience with the 787, but has not yet decided which regular routes it will operate on.

Although the new aircraft will be used to replace the 10 A330-200s that will be gradually returned to parent company Qantas, it could choose to hold some aircraft for a longer period to reinforce its dominant position in the budget long-haul market.

Similarly, with 14 787s set to replace a smaller number of A330s, Jetstar will likely look to add frequencies to existing markets or launching new destinations as the opportunity arises over the next few years.

Barring any major hiccups that may dampen the leisure market - such as a large scale devaluation of the Australian dollar - Jetstar is well placed with its widebody fleet to make the most out of Australians' large appetite for overseas travel.