I have to admit that I’m a big Singapore Airlines (SIA) fan, and when someone says “you’re a great way to fly”, I can almost sing the SIA melody in my head.  But even I was surprised when SIA announced that they will be launching a low-cost long-haul airline, on the lines of AirAsia X and Jetstar.

Yes, Singapore Airlines is no longer the most profitable airline in the world (Cathay Pacific took over that title), and yes they’re losing market share to the likes of Emirates and AirAsiaX (to a lesser extent), but to go with a business model that’s hardly proven was a surprise move for a brand that’s been risk-averse of late.

While the initial reports stated that a good amount of analysis has gone into the decision and a “largely untapped market” exists, it’s safe to say that SIA is playing catch up in a market carved out in its backyard by AirAsia X and Jetstar. While the key success factor for SIA till date has been its endearing Singapore Girl brand, that’s exactly the dilemma they need to address – whether to extend the brand to the low cost airline or not….

Last week, I wrote an article for CNBC, which talked about the agility of Qantas that keeps the airline in profitable territory. The article resulted in a lively debate with a number of Aussie aviation experts down under, and one of them kindly offered to write a detailed Guest Post on SimpliFlying on how it’s actually Jetstar that’s keeping Qantas afloat.

Grant McHerron (aka Falcon124) is an opinionated aviation enthusiast & co-host of Plane Crazy Down Under, Australia’s only aviation podcast. He is an online/digital project manager and perpetual student pilot who can often be found crewing hot air balloons, working airside at Avalon Airshow and plane spotting at airports around the world. He graciousouly hosted me when I visited Melbourne last year, and we almost watched the sunrise in his hot-air balloon Enjoy!

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The latest half-yearly results from QANTAS continue to show an airline that is hemorrhaging cash on its mainline, full service routes. While QANTAS are certainly showing signs of agility, the primary factor keeping the group afloat is the success of their Low Cost Carrier brand Jetstar.
The creation of Jetstar
Towards the end of the 1990′s, QANTAS saw …

This article was first published on the CNBC blog———-Qantas announced today a net profit after tax of A$58 million for the first half of the financial year, down from $210 million a year earlier, although the airline did recover from a loss in the second-half of last financial year. This 72% dip in profits resulted in the shares falling by up to 7.2% in early morning trades. However, Alan Joyce, the CEO, says the carrier has done better than most of its rivals. And it has, indeed, thanks to its agility.Agility through smart cost-cuttingAlthough revenues dipped by 13.4%, costs were slashed by 16.2%, which shows Qantas’ diligence and discipline in reducing expenditure in the past year. The cutting of frequencies to unpopular routes and grounding of older aircrafts was key to these cost savings.Load-factors have been the highest in five years – at 82.4%, on flights that carried a lesser number of total passengers as compared to the past year.This simply means that flights were more full than in the past, despite the recession. Of course, the downside was that this was achieved by …

Let me say this again. I think Air Asia is one of the most innovative airlines in the world today – right up there with JetBlue, Virgin, Singapore Airlines, Southwest Airlines and LAN Airlines. And today they pulled out a trump card – a joint venture with Australia’s Jetstar Airways. You can keep reading the press releases, but here’s the essence of the agreement and how it will benefit the airlines and their customers (you and I!) What the AirAsia and Jetstar “budget alliance” means The most significant difference is the departure from Star Alliance – type marketing or revenue driven alliances. Air Asia and Jetstar have formed a cost alliance, or what I’d call a “budget alliance” (pun intended). Here is the nitty gritty. The airlines will pursue joint procurement of aircraft – This means that they will be able to leverage economies of scale while buying from Airbus. Joint design specifications – since they’re going to order a lot of planes, they can demand from Airbus things like a twin-aisle A320 or more efficient …