Independent Singapore-based carriers Jetstar Asia and Valuair have begun restructuring their operations after coming under common ownership – and in an unusual move, the revamp will include codesharing with Qantas Airways.

The two airlines were launched last year as separate low-cost carriers and merged recently under a common holding company, which has Australia’s Qantas as its biggest single shareholder. Separate operations are being retained for now, but the two have been studying ways to restructure their respective networks.


The first casualty, the Australian city of Perth, was expected. Services to the city by Valuair were dropped early in October and more network changes are expected. Valuair was also to have dropped scheduled services to the Chinese cities of Chengdu and Xiamen by the end of October, although it says charter services will be operated, depending on demand.

“We’re an airline in transition and changes will need to be made from time to time,” says the chief executive of the two carriers, Ken Ryan.

However, Ryan says services to Denpasar, on the Indonesian island of Bali, are to be added by Valuair, which is also increasing its services to the Indonesian capital Jakarta and launching services to the Indonesian city of Surabaya.

The push to expand into Indonesia may be one of the reasons why the airlines are not merging operations. Bali, Jakarta and Surabaya have been off limits to low-cost carriers as the Indonesian government has said it will only allow them to be served by full-service airlines. It does not consider Valuair to be a true low-cost airline, however, as it has some in-flight frills.

Jetstar Asia will, meanwhile, increase services to the Indian city of Kolkata and launch services to another Indian city, Bangalore. And in an unusual move for a low-cost airline, it plans to add the Qantas code to some of its flights later this year. Qantas says it intends to codeshare on Jetstar Asia flights from Singapore to Kolkata and the Thai cities of Bangkok and Phuket. It has applied to Australia’s International Air Services Commission for permission to do so from December.

This revelation prompted fellow Singapore-based carrier Tiger Airways to take a public shot at Jetstar Asia, saying its rival was no longer truly low cost.

Chief executive Tony Davis says Tiger “has confirmed its position as Singapore’s sole surviving low-fare carrier following plans by Qantas to start codesharing arrangements with its 44.5%-owned associate, Jetstar Asia”. He adds: “What the codesharing means is that Jetstar Asia will effectively cease to operate independently as a low-cost carrier. It will become the regional services arm of Qantas in Asia. The move is a ‘back-door’ way for Qantas to enter the Singapore and regional aviation market.”

Tiger, Jetstar Asia and Valuair all operate leased Airbus A320s in single-class configuration. Tiger, which is 49%-owned by Singapore Airlines (SIA), follows the strict no-frills model with no assigned seating and snacks at a price; Jetstar Asia has assigned seating and offers hot meals on longer sectors at a price; and Valuair has assigned seating and complimentary meals.

The new players are meanwhile prompting the SIA Group to revamp its operations. Regional subsidiary SilkAir, which operates A320s with business and economy classes, will be dropping services to Hyderabad in India and they will be replaced by SIA-operated flights. SIA will in turn drop its services to Shenzhen in China and Surabaya and hand them over to SilkAir.


Source: Airline Business