Jetstar Asia's exit shrinks options for consumers, but unlikely to dent Changi's hub status

The Star

a day ago

SINGAPORE: Jetstar Asia's impending exit after more than two decades in Singapore is a blow to budget-conscious travellers, even if the low-cost airline's modest three per cent share of Changi Airport's traffic might suggest otherwise.
Although Changi remains well-served by other budget carriers on busy routes such as Bali and Jakarta, Jetstar Asia's departure will sever non-stop links to four emerging holiday spots.
The Singapore offshoot of Australia's Jetstar – which began operations in December 2004 – is the only airline that serves Okinawa in Japan, Wuxi in China, Labuan Bajo in Indonesia and Broome in Australia from Changi.
While Changi Airport Group (CAG) has said it would work with other airlines to restore connectivity, the prospect of losing non-stop connections to these cities comes at a time when Singapore is looking to aggressively expand the number of destinations linked to Changi.
The airport is connected to about 170 cities worldwide, and the target is to surpass 200 cities by the mid-2030s, when Terminal 5 opens.
Maintaining as many air links as possible is good for airlines and consumers, especially when low fares are in the mix. This also strengthens Changi's competitiveness as a transit hub.
Jetstar Asia, which is 49 per cent owned by Australia's Qantas and 51 per cent by Singapore company Westbrook Investments, cited higher airport fees and aviation charges, as well as intensifying competition, as reasons it had become unsustainable to continue operations at Changi.
Linus Benjamin Bauer, founder and managing director of aviation consultancy BAA & Partners, said rising costs are squeezing low-cost carriers.
'Many airlines still operate under pre-pandemic pricing models, but face a vastly more expensive cost base,' he said, adding that more exits or mergers, especially among smaller budget airlines, can be expected.
The writing had been on the wall for some time for Jetstar Asia.
It was the slowest of the three Singapore-based carriers – the others being Singapore Airlines (SIA) and its budget arm Scoot – to rebound from the Covid-19 pandemic. Its fleet of 13 Airbus A320 aircraft is down from 18 before the pandemic.
Its move from Changi's Terminal 1 to Terminal 4 in March 2023 – which the airline protested publicly – also lengthened connecting times for passengers transferring to Qantas or its partner airlines.
T4 is a distance from T1, where Qantas operates, for instance.
When Singapore announced its latest round of airport fee hikes in November 2024 to fund improvements to Changi Airport and defray rising costs, Jetstar Asia had warned the increases would have an impact on its ability to offer low fares. It also noted that most of CAG's planned upgrades do not apply to T4, where it operates.
Under the new fee structure, landing, parking and aerobridge charges for narrow-body jets such as the A320 will rise yearly, climbing from about $1,200 (US$935) per landing before April 2025 to $1,725 in April 2030. Passenger fees will also go up in stages until the end of the decade.
Passenger fees at Changi are already steeper than those in regional hubs such as Bangkok.
While such costs are seen as necessary to help airports fund infrastructural improvements to meet future demand, the increases have made it increasingly difficult for low-cost carriers such as Jetstar Asia to keep air fares low – their key selling point – without passing the extra costs on to customers.
'Singapore has become a high-cost environment for a low-cost carrier, and Qantas Group and Jetstar feel they can get better returns on their assets in other markets,' said Mayur Patel, Asia head at consultancy OAG Aviation.
It does not help that in some cases, full-service carriers such as SIA can also offer low fares if tickets are booked early. This is because they have the flexibility of deploying wide-body or narrow-body aircraft, depending on demand.
After its closure, Jetstar Asia's 13 planes will be redeployed progressively across the Qantas Group to support fleet renewal and growth in Australia and New Zealand in line with demand.
The low-cost airline's closure comes as global demand for air travel remains strong.
Airlines are expected to fly a record 4.99 billion passengers in 2025 – a four per cent increase from 2024 – according to the latest forecast from the International Air Transport Association. The Asia-Pacific region is driving this growth.
So why has Jetstar Asia struggled to take advantage of this?
This has partly to do with the intensity of competition on seven of the 16 routes that it serves, which are operated by at least three other airlines, data compiled by Mr Patel showed.
Singapore-Bali is served by nine airlines including Jetstar Asia, Singapore-Jakarta by eight, and Singapore-Kuala Lumpur by seven.
Even fellow low-cost carrier AirAsia has scaled back on some routes of late, likely due in part to higher operating costs. It dropped its Singapore-Ipoh and Singapore-Phuket services, and cut back flights to Bangkok's Don Mueang Airport earlier in 2025.
Jetstar Asia's exit leaves SIA and Scoot as the only Singapore-based carriers.
While consumers will have one less option, choices still abound, with one-fifth of the 100 airlines at Changi being low-cost carriers. Overall, they serve more than half of the 170 cities that the airport is connected to.
Patel said any connectivity gaps left by Jetstar Asia's exit can be filled only in the short to medium term by other carriers.
This is due to delays in the delivery of new aircraft and the time needed for capacity changes.
Ultimately, Jetstar Asia's withdrawal from Singapore will shrink the choices available to consumers, particularly those eyeing the non-stop links it served exclusively.
But its limited market share means that the impact on Changi's standing as a hub will likely be minimal. - The Straits Times/ANN