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Jetstar Vs Tiger Vs Air Asia: Who Will Win?  
User currently offlinesankaps From United States of America, joined Jan 2008, 2252 posts, RR: 2
Posted (1 year 5 months 4 days 20 hours ago) and read 4654 times:

I have been getting increasingly intrigued by the various moves, tactics, and strategies being pursued in Asia by Jetstar, Tiger, and Air Asia. The are all trying to set up subsidiary airlines in various Asian countries under their own brands, often partnering with rivals (for example, Jetstar Japan is a JV with JAL while Air Asia Japan is a JV with ANA). On top of that Jetstar and Tiger sems to be going at it in each others' home territories, Australia and Singapore, in what appears to be tit-for-tat moves.

To me it seems Air Asia seems the least hassled and most focused on being a pure classic LCC, though Air Asia X continues to dabble in the longer-haul wide body LCC model. Tiger is sticking to the classic narrow-body LCC model, but seems to be running into operational and regulatory problems and tripping up now and then. Jetstar seems to have done a lot of stop-starts, adding and chopping of routes, and appears to be a bit of a hybrid -- the have A330s, not just A320s; they offer business class in the A330s (Air Asia X does too), and they offer flights connections, interlining, code-sharing, etc, which I dont believe Air Asia / X or Tiger do.

So what are your thoughts? Which of these do you think will prove to be the winner? My vote is for Air Asia, though am not convinced on Air Asia X.

Sankaps.

9 replies: All unread, jump to last
 
User currently offlineLufthansa From Christmas Island, joined May 1999, 3196 posts, RR: 10
Reply 1, posted (1 year 5 months 4 days 19 hours ago) and read 4664 times:

Jetstar and Air Asia.

Lionair are probably also worth mentioning due to sheer size, but i don't see tiger really gaining much traction outside of close proximity to singapore. Rather than look at the US example, i think Europe provides a better indication of things. Easyjet and Ryanair had a massive turf race to cover the entire continent, but like tiger, there is still room for the likes of wizzair and norwegian. Air Asia have done well in Malaysia, indonesia and thailand but jetstar have a much larger presence in the crutial markets of singapore, and the joint venture with the chinese should ensure it becomes a major player in china. Jetstar already has a significant presence in Japan so growing a local carrier there is just an extension, and jetstar proved what the japanese thought was impossible. To sell direct to the public and not through packaged holiday operators. They successfully strongly advertised and taught the japanese public to book direct at jetstar.com.
It will only be a matter of time before 787s start flying japanese tourist to HNL, indonesia and probably even new zealand.

There is yet another carrier that needs to be watched here, and that is scoot. Remember with the longer average sector lengths in Asia, frequency is less important and very expensive airport charges lend themselves to larger aircraft. when we are looking at flights over 4 or 5 hrs turn around times become insignificant. I wouldn't be surprised if tiger and scoot merged at some point.


User currently offlineStitch From United States of America, joined Jul 2005, 29656 posts, RR: 84
Reply 2, posted (1 year 5 months 4 days 19 hours ago) and read 4664 times:
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Quoting Lufthansa (Reply 1):
I wouldn't be surprised if tiger and scoot merged at some point.

Perhaps Scoot will become Tiger's long-haul arm like Air Asia X is to Air Asia (and Jetstar's long-haul operations).


User currently offlineRyanairGuru From Australia, joined Oct 2006, 4681 posts, RR: 4
Reply 3, posted (1 year 5 months 4 days 17 hours ago) and read 4664 times:

Quoting sankaps (Thread starter):
Jetstar and Tiger sems to be going at it in each others' home territories, Australia and Singapore, in what appears to be tit-for-tat moves.

While TT's entry to Australia will forever remain a mystery to me (it might have been a two-fingered salute to JetStar, but it has certainly been a costly one), I don't think that saying that JQ is in SIN for tit-for-tat reasons is accurate.

IIRC JetStar actually predated Tiger, and were effectively the first LCC in the Singapore market. Also, QantasGroup is the second largest airline[s] at SIN, so they already had something of a presence in the market prior to the orange invasion.

Quoting Lufthansa (Reply 1):
They successfully strongly advertised and taught the japanese public to book direct at jetstar.com.

JetStar's marketing and education campaign in Japan was masterful. They are now one of the most recognised brands in Japan. As a market, Japan is often a hard nut to crack for foreign businesses. Japanese consumers are - for various reasons - less likely to change their spending habits than almost any other cultural group I can think of, and for JQ to have steamrollered their way through the country is absolutely incredible!


One last thing re JetStar, with (soon to be) hubs at SIN, HKG and NRT I would suggest that they are the best positioned across the region. AirAsia are very big in Malaysia and Thailand, but simply don't match up to the breadth of JetStar's coverage from Tokyo in the north to Melbourne in the south.



Worked Hard, Flew Right
User currently offlinesankaps From United States of America, joined Jan 2008, 2252 posts, RR: 2
Reply 4, posted (1 year 5 months 4 days 14 hours ago) and read 4664 times:

Quoting RyanairGuru (Reply 3):
While TT's entry to Australia will forever remain a mystery to me (it might have been a two-fingered salute to JetStar, but it has certainly been a costly one), I don't think that saying that JQ is in SIN for tit-for-tat reasons is accurate.

What I meant was Tiger (partly owned by SQ) entered Australia asa tit-for-tat for Qantas setting up Jetstar Asia in Singapore.

Quoting RyanairGuru (Reply 3):
IIRC JetStar actually predated Tiger, and were effectively the first LCC in the Singapore market. Also, QantasGroup is the second largest airline[s] at SIN, so they already had something of a presence in the market prior to the orange invasion.

Exactly.

Quoting RyanairGuru (Reply 3):
One last thing re JetStar, with (soon to be) hubs at SIN, HKG and NRT I would suggest that they are the best positioned across the region. AirAsia are very big in Malaysia and Thailand, but simply don't match up to the breadth of JetStar's coverage from Tokyo in the north to Melbourne in the south.

But Air Asia is in Japan too now. And is building up presence in India as well (thus far only int'l, but media reports speculate they may be looking at domestic as well). Jetstar entered and then quickly exited India, but now with their Japan market-building experience they can try again?

It looks like we both agree that Tiger is likely running last in this three way competition?


User currently offlineLufthansa From Christmas Island, joined May 1999, 3196 posts, RR: 10
Reply 5, posted (1 year 5 months 4 days 10 hours ago) and read 4663 times:

Quoting sankaps (Reply 4):
But Air Asia is in Japan too now.

It may be so and but in a much smaller way. China Eastern is ironically a key in all of this because of their involvement in JQ Hong Kong will ensure JQ get a good reception on both sides of the market, ie - Japan and China and vs versa. I'd also argue a not insignificant amount of Air Asia's success has come from MAS's problems rather than Air Asia's genius.
Jetstar have certainly covered more turf. They're already flying everywhere from Beijing to HNL, from domestically inside New Zealand to Vietnam, though this may be a special case where the local government really doesn't want anybody putting pressure on the flag carrier. (ryanair also ran into issues with airports forcing it to pull some routes).

I'd put it forward that we will see significant growth once the 787s come onto line. North Asia to Southeast Asia are similar kinds of distances to transatlantic, so the A320 isn't the best aircraft for all of these routes, or even at all possible. I think you could start seeing rotations like SIN-BKK-NRT on the 787. Both brands will be strong and survive. However I think JQ is best positioned to make inroads into the chinese market.


User currently offlineMillwallSean From Singapore, joined Apr 2008, 1214 posts, RR: 6
Reply 6, posted (1 year 5 months 4 days 10 hours ago) and read 4663 times:

Air Asia without a doubt. Nothing comes close to them they are number 1, number 2 and number 3.

I think many Australians overestimate the position of Jetstar in SE Asia.
I see Tiger as a stronger entity in Singapore than jetstar. Tiger also serves more destinations from SIngapore plus have a bigger fleet than jetstar. Also the ownership of Tiger makes them more important to Singapore than jetstar. Tiger serves its purpose for the Singaporean government.

However we cant compare neither Tiger or jetstar to Air Asia. Air Asia is the inventor and driver of the lowcost boom in the Asean. They have expanded and are now the only pan Asean lowcost carrier. They have more than a hundred aircrafts (compared with about 20 for Jetstar Asia and Tiger) and flies to 80 destinations (compared with 20-25 for Tiger and jetstar). No one comes even remotely close to the size and scope of Air Asia in SE Asia.
The ventures thats taken place outside of SE Asia and the Asean market are interesting. both Air Asia and jetstar has set up shop in Japan. Air Asia is rumoured to start Air Asia Korea in 2013 either by a purchase of an existing player or through a new venture.

While Air Asia and the Singaporeans havent been able to agree upon the conditions for Air Asia to set up their own hub in Singapore (most outsiders and Air Asia says that Singapore government are protecting its own airlines, the Singaporeans say Air Asia have ridiculous demands) they still fly to 14 destinations from Singapore. All in the Asean. Thats only ten destinations or so behind Tiger and jetstar and these routes are flown with much lower costs.

Jetstar has tried to set up bases but not been able to play the political game well. Vietnam for instance failed rather spectacularly. and they struggle in the Asean. Quite a few routes have had to be cancelled. Instead they have shifted their focus to Singapore-China but this market is a hard one. the smaller Chinese airlines are slowly building their presence and makings secondary Chinese cities less of a goldmine. Same has happened to India where several routes have had to be cut by airlines.

I would add the lowest of the lowest cost airlines, Cebu Pacific to this thread.
They are utilising their planes around the clock and have an ultra lowcost set up. While they dont have the coverage that most other airlines have they are ultra lowcost and are planning long haul eastwards. They are a player even Air Asia cant outmuscle on price and even though they are dependent upon the overseas filippino community (its huge indeed) they are profitable and the day they decide to set up bases in other Asean countries I see them being a very dangerous competitor.

To be honest I see jetstar struggle in HongKong and Singapore longterm. I hope they stay on because the more lowcosts the better for people like me. But I dont see their Asian ventures as successful enough to be kept for another decade.
I do see Air Asia opening up a base at SIN and when that happens I see jetstar taking down the sign. They cant compete with those costs and they know it very well.



No One Likes Us - We Dont Care.
User currently offlineLufthansa From Christmas Island, joined May 1999, 3196 posts, RR: 10
Reply 7, posted (1 year 5 months 4 days 10 hours ago) and read 4663 times:

Air Asia may be the clear leader in ASEAN countries but the original poster wasn't restricting it to just that, and by the presence of Tiger in australia I think you must extend this to include both the Australian and New Zealand markets. After all a significant part of jetstar's business is between these countries and Asia. Also talk of jetstar asia...the singapore arm being just about 20 aircraft is like talk of air asia indonesia being something similar. It isn't the whole picture. it completely ignores 11 A330 aircraft, for instance that are flying legs like Melbourne-Singapore-Beijing (wouldn't air asia love that).

Asia is more than just south east asia, and Asia-Pacific is a very large part of the market. That pushes jetstar from a mere 20 or so aircraft to well over 100 including widebody service. And lets not forget all the 787s coming are at this point going to be singaporean registered.

I think in this turf race you will see both groups gain key advantage in certain markets. Like the UK domestic market clearly belongs to Easyjet, whiles the UK-Ireland market is Ryanair's. Ryanair's Stockholm bases gave it the swedish-UK market, where easyjet haven't managed to make inroads there much yet, but Easyjet do have a significant presence out of ORL. I see it forming a similar pattern. And while some are doubting its ability, the fact is jetstar have got into bed with the 2nd largest mainland chinese carrier, and thus the chinese government for their Hong Kong joint venture. It's partners like that who open doors and make sure you don't get stonewalled. If they had partnered with say Air Macau i'd say write that investment off. But if you look at the total market, saying Air Asia has a base at DMK serving bangkok, how is that really any different to saying jetstar has a base in DRW serving asia/northern australia or its 20 or so aircraft (soon to be a lot more) based in SIN? We don't not include ryanair's fleet based in italy because its nowhere near ireland?

[Edited 2012-11-12 16:41:00]

User currently offlinehuaiwei From Singapore, joined Oct 2008, 1099 posts, RR: 2
Reply 8, posted (1 year 5 months 4 days 9 hours ago) and read 4663 times:

I will give my longer reply later, but meanwhile...

Quoting RyanairGuru (Reply 3):
IIRC JetStar actually predated Tiger, and were effectively the first LCC in the Singapore market. Also, QantasGroup is the second largest airline[s] at SIN, so they already had something of a presence in the market prior to the orange invasion.

...is untrue. Tiger was incorporated on 12 December 2003, started selling tickets on 31 August 2004 and began flying on 15 September 2004. Jetstar Asia commenced ticket sales on 7 December 2004 and first flew on 13 December 2004. Jetstar itself did not fly to Singapore until 16 December 2010.

That said, AirAsia was the first in Singapore, although it was not the parent company itself who did so. Thai AirAsia commenced flights to Singapore since 16 February 2004. Meanwhile, the first true LCC based in Singapore was Valuair which first flew on 5 May 2004.

So when Jetstar finally started flying in Singapore, it was regarded as a latecomer struggling to compete with incumbents. Today, it is still often regarded as an LCC of last resort because Tiger and AirAsia routinely sell cheaper tickets.



It's huaiwei...not huawei. I have nothing to do with the PRC! :)
User currently offlinemandala499 From Indonesia, joined Aug 2001, 6590 posts, RR: 75
Reply 9, posted (1 year 5 months 3 days 18 hours ago) and read 4661 times:

Quoting Lufthansa (Reply 1):
Air Asia have done well in Malaysia, indonesia

Indonesia Air Asia's routes are a handful. They have retreated from most domestic routes and only have just began doing them again... and their size is small. This company can grow much quicker but the focus of the group has until recently, been elsewhere, therefore they missed a good chance in grabbing the domestic market, they're reliant on international flights. They're going back in to the domestic market, but it's not an easy hill to climb for them... but they're not in a hurry.

Quoting Lufthansa (Reply 1):
Lionair are probably also worth mentioning due to sheer size,

80-100 aircraft, but mainly in domestic market... their international ops, is tiny.



When losing situational awareness, pray Cumulus Granitus isn't nearby !
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