Jetstar Australia has announced that it will be closing its Darwin base and dropping all services to Ninoy Aquino International Airport in Manila.
The airline revealed that all Philippine services operated by Jetstar Australia would be dropped as of March 31, 2014 citing increasing competition from foreign carriers. The airline operated four weekly flights between Darwin and Manila that continued onto Tokyo.
The entry of Philippine Airlines into the Manila-Darwin market last June is expected to have played a role in Jetstar Australia’s decision. According to Stephen Moynihan, a spokesperson for Jetstar Australia, passengers wishing to travel to the Philippines on Jetstar from Australia will now have to route through Singapore to board the Jetstar Asia service to Manila.
Philippine Airlines arrived in Darwin in June 2013 with daily service from Manila complemented by four onward flights to Perth and three to Brisbane. However, the service to Perth was dropped in September with Philippine Airlines opting to maintain the Manila-Darwin-Brisbane route that has proven to be successful. Darwin has been a particularly solid market for Philippine Airlines as the carrier has been able to attract a number of passengers from the city’s Filipino community as well as transit traffic connecting beyond Manila onward to Japan.
Jetstar Australia parent Qantas says that the increased competition between Manila and Darwin has contributed to its problems as the carrier tries to cut costs by $2 billion over the next three years. The decision to drop Manila is part of a greater effort to restructure with Jetstar Australia shifting three of its aircraft stationed at Darwin to Adelaide resulting in the loss of 93 jobs in Darwin. “Jetstar has been clear in the past that our flying from Darwin is among the most marginal on the network,” the airline reported. “It makes sense to base aircraft where there is more network growth.”
The entry of Philippine Airlines last June broke the monopoly that Jetstar Austalia was enjoying on a lucrative but marginal route. Jetstar’s service from Manila to Tokyo would have also been troubled by the expansion of the Japan-Philippines bilateral air agreement that paves the way for increased service to Japan by Philippine carriers resulting in increased competition in the market. Philippine Airlines alone is expanding its capacity in the Tokyo market adding 100 percent of existing capacity beginning on December 15.
Philippine Airlines recently upgraded capacity between Manila, Darwin, and Brisbane shifting to the larger Airbus A321 jet on November 16. The move suggests growing traffic shifting towards Philippine Airlines after the legacy carrier dumped low prices on its low cost carrier competitor. The departure of Jetstar Australia from Darwin later this year will enable Philippine Airlines to consider reinstating service to Perth. The departure of Jetstar will inevitably boost sales for Philippine Airlines in both the Darwin-Japan and Darwin-Philippines markets. In addition, Philippine Airlines also has an opportunity to offer the Darwin market connections to its network in North Asia, Europe and North America.
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