JetStar to invest US$500 million in Singapore hub, adds aircraft

Manila Bulletin
July 18, 2011

SINGAPORE (Reuters) – Budget airline JetStar, a unit of Australia's Qantas , plans to invest US$500 million in its Singapore hub, mostly by adding seven Airbus aircraft, Chief Executive Bruce Buchanan said.

JetStar will add five new Airbus A320 single-aisle aircraft and an additional two wide-body Airbus A330 planes at the Singapore operation to support its expansion, the carrier said in a statement.

Competition among Asian budget carriers is heating up with Singapore Airlines , the world's second largest airline by market value, planning to set up a long-haul budget carrier by mid next year.

JetStar competes with Singapore's Tiger Airways , which is grounded by authorities in Australia due to safety issues, as well as Malaysia's AirAsia and some smaller Southeast Asian budget carriers.

Buchanan said the grounding of Tiger only makes a ''small positive impact'' on JetStar's operations due to the small size of Tiger's Australian domestic service.

He told Reuters that the company is aiming to maintain a 20 percent share of the Asia Pacific low-cost carrier market and might need to have as much as 400 aircraft by 2020.

''The total (fleet size of) the low-cost carrier market (in Asia-Pacific) is about 450 aircraft today and we envisage it to grow to in excess of 2,000 aircraft by the end of the decade,'' he said on the sideline of a media briefing in Singapore.

''To maintain 20 percent market share by 2020, we need about 400 aircraft,'' Buchanan added without elaborating when the carrier will start making orders of those aircraft.

JetStar, which operates nearly 80 aircraft in the region, mostly single-aisle A320s, has about an additional fifty A320s and around the same number of Boeing 787 Dreamliners in order.

Buchanan said the delivery of its 787 Dreamliners is still on schedule with the first aircraft coming into service by the end of 2012.

JetStar is in talks with Airbus over the A320neo programme, he said, but declined to say when the company will order the aircraft.