The trench warfare between Singapore Airlines controlled Tiger Airways and the Qantas controlled Jetstar franchise dug in a bit deeper this morning when Jetstar Asia announced a new matrix of interline arrangements with its focal point at Changi Airport.
It means Qantas is going to use Changi against Singapore Airlines the same way the Singaporeans had been using it against Qantas, as a hub for feeding its new originating markets in Singapore, Malaysia, Indonesia and across other SE Asia centres on Jetstar short haul flights into the Qantas and Jetstar International networks.
Changi and its wide open indoors. Photo: Ben Sandilands
Until now, the main benefit of Changi to Qantas has been to transfer passengers between Qantas flights from Australia and consolidate loads to London and Frankfurt.
But this is like mounting an escape into Changi, or at least, a full on bid to storm the Singapore Airlines citadel. Growth and the thick margins low cost carriers can make out of thin prices offer an escape from the current recession driving full service carriers towards if not to the wall.
Having the Qantas group use Changi to connect with the only growth market left in the hemisphere, which is low cost carrier regional services, and build them up in advance of Jetstar International flying directly to Europe is not something Singapore Airlines would welcome.
Jetstar Asia and Valuair Chief Executive Officer Ms Chong Phit Lian said,
“This agreement provides both Jetstar and Qantas Group airlines with further opportunities to support an expanding Pan Asian network with renewed reach into new customer markets.”
The one Singapore Airlines thought it owned too.
Interlining does make travel easier for customers, but its real benefits are to the airlines involved or the agents. It means flights on one airline can be sold in conjunction with those on its interline partners in a single transaction.
The sales process is also faster, easier and potentially more profitable for the seller, whether it is one of the airline sites, a third party internet site, or a travel shop creating an itinerary with hotels, tours and other extras included.
But Tiger Airways doesn’t have a wide body fleet, unlike the Jetstar brand. It seems to be isolated behind a cordon sanitaire by Singapore Airlines, which has passenger statistics that are dropping like a brick because of the global financial crisis and the longer term slide from relevancy for Singapore as a gateway to China or India now that each country has opened up a plethora of new non-stop routes to their major centres from Europe and the US.
In the April statistics issued today, Singapore Airlines carried 18.2% fewer passengers than the same month in 2008, even though having the Easter travel season fall in April this year should have helped the numbers.
Put in a broader context, Tiger’s decision to invade the main Qantas domestic market by launching into Sydney from July appears to have been followed by an even more painful counter blow.
