JAL addresses overtourism, impact of weak yen
JAL's Managing Executive Officer Ross Leggett speaks to CNA's Yasmin Jonkers on the impact of the depreciating yen on inbound and outbound travel on the sidelines of the IATA meeting in New Delhi. He also addresses overtourism and the hurdles in relation to the carrier's plans in India, now the third-largest aviation market in the world.
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SINGAPORE: Singapore's skies will soon be a little quieter. After more than 20 years of flying budget-conscious travellers across Asia, Jetstar Asia—Singapore's homegrown arm of Australia's Qantas Group—will cease operations on July 31. The move comes amid what the airline describes as 'really high cost increases' and an inability to compete with regional low-cost carriers in an increasingly crowded market. A final descent The closure, announced by Qantas on June 11, is set to impact more than 500 employees and 16 regional routes, including links to Malaysia, Indonesia, Japan, and emerging tourist hotspots like Wuxi and Labuan Bajo. Jetstar Asia's fleet of 13 Airbus A320s will be progressively redirected to Australia and New Zealand as part of Qantas' broader fleet renewal programme. Group CEO Vanessa Hudson said the airline's cost base had 'materially changed,' with some supplier costs surging by as much as 200 per cent. 'We are currently undertaking the most ambitious fleet renewal programme in our history,' she added, noting that nearly 200 new aircraft are on order. See also Govt says RTS Link fares will be determined by operator Jetstar Asia is expected to post a loss of A$35 million this financial year, adding pressure to Qantas' strategic priorities. Rising costs, rising competition Jetstar Asia's struggles didn't happen overnight. For months, it had been battling headwinds on multiple fronts: escalating airport charges, costly ground handling, rising fuel prices, and stiff competition from Southeast Asia's budget heavyweights like AirAsia and BatikAir. CEO of Jetstar Group, Stephanie Tully, told reporters the airline's Singapore base had become increasingly unsustainable. 'Double-digit cost increases in fuel, airport fees, ground handling and security have significantly undermined our ability to remain competitive,' she said. Compounding the pressure was Jetstar Asia's move to Changi Terminal 4 in March 2023—a shift the airline initially resisted. Tully admitted the relocation 'had an impact' on the business, noting that Terminal 4 is not linked to the others via MRT, making transfers more cumbersome. What happens next? Jetstar Asia has reported that it will continue flying for the next seven weeks. Passengers with tickets on cancelled flights will be offered full refunds, and efforts are underway to reroute affected travellers. Those holding Jetstar vouchers will be contacted in August for monetary reimbursement. See also We screwed up in Japan, says Tony Fernandes Qantas has said six of Jetstar Asia's planes will be used to replace leased aircraft in Australia, while four will take over ageing aircraft currently serving mining routes. Two more will be deployed to Jetstar in Australia and one to New Zealand, potentially opening new routes and creating over 100 local jobs. International operations of Jetstar Airways (Australia) and Jetstar Japan remain unaffected. What does it mean for Singapore Changi Airport may feel the turbulence. Jetstar Asia accounted for 3 per cent of Changi's traffic last year, serving key Southeast Asian cities as well as lesser-flown destinations. According to an aviation editor, Jetstar Asia's exit could leave some of these destinations without any direct links to Singapore, inevitably affecting the airport's ambition to grow its international city pairings. While airlines like Scoot—armed with a growing fleet of smaller Embraer jets—could potentially fill the gaps, the loss is nonetheless significant. The Civil Aviation Authority of Singapore (CAAS) acknowledged the closure but reaffirmed Changi's resilience. It noted that in 2024 alone, the airport added 11 new city links and welcomed eight new airlines, including four low-cost carriers. Still, the impact on the broader landscape is undeniable. Smaller foreign airlines operating out of Changi face the same structural challenges—rising costs, less-than-ideal operating slots, and increased competition from national carriers and well-backed players. End of an era Jetstar Asia's closure marks the end of a uniquely Singaporean chapter in regional aviation. Born out of Qantas' vision to capture Asia's booming budget travel market, the airline played a pivotal role in democratizing air travel across the region. Now, it becomes a case study in the volatility of the low-cost carrier model—especially in high-cost, tightly regulated hubs like Singapore. As Jetstar Asia prepares for its final descent, one thing is clear: the economics of budget air travel in Southeast Asia are shifting, and even long-standing players aren't immune to the turbulence.
