China next on Jetstar’s list?

“We have considerable resources dedicated to a roll out plan of new ventures and growth opportunities,” he said in relation to opportunities in China.

“I think there are opportunities to work in that marketplace, but exactly how I don’t think is going to be decided for some time. ” Already Jetstar’s Singaporean based Jetstar Asia operation has a significant presence in mainland China, with plans to operate from Singapore to up to 12 destinations by the end of 2011.

‘’We want to build the brand ahead of getting more and more established in [China],” Buchanan later told journalists.

“So what you’ll see I think from us is connecting the dots first up, so further growth in Singapore, connecting the dots out of Vietnam, connecting the dots out of Japan, possibly connected the dots out of Australia, and then you never know what the opportunities are beyond that. ” Buchanan did note in his speech that “to do business in China you must first commit significant time and resources to build relationships. Every market we work in Asia has a different culture and our approach must be tailored to succeed. ” How Jetstar tailors its approach to China will be interesting to see.

“It is hard to say in a market like China what the regulatory landscape is going to be,” Buchanan said of the potential to set up a joint venture airline in China, like it is doing with JAL and Mitsubishi in Japan. But he noted that Shanghai based low cost carrier Spring Airlines had been given permission to start operations, which was a “good sign” that new privately owned airlines can be given regulatory startup approval.

Even if a Jetstar joint venture can’t be established in China in the short term, “joining the dots” will see Jetstar “surround and service China from many, many different points because then you get a really compelling network, irrespective of what the domestic footprint is. ” Serving China with a joint venture airline based in Hong Kong is another possibility, according to media reports.

“Anything is possible,” said Buchanan.

But clearly, a Chinese operation would be a key objective.

“we’re always going to be on the watch about what opportunities there are to do stuff domestically in China as well. ” Key to enabling Jetstar’s expansion in Asia is the 110 Airbus A320 Family aircraft the airline’s parent Qantas has committed to ordering, including the A320neo.

The extra payload range of the neo “changes the dynamics,” Buchanan said. “That extra range makes a big difference to some of the network designs in Asia. So for example Bali out of the east coast of Australia is a narrowbody operation under a neo structure, so it gives you much greater frequency into those existing markets with a much more effective cost structure, so there are some interesting trade-offs there.

“Shanghai out of Singapore is very much within the range of the neo, even Beijing we can reach with the neo, so there’s a few interesting network changes that we will be able to strike once the neo comes on. ” Those neos won’t come on stream until 2016, but Buchanan also confirmed that from 2013 all Jetstar A320 deliveries will feature the ‘sharklet’ winglets.

“That [sharklets] will give us half of the [neo’s] range increase as an intermediate step before we get to the neos. ” Wherever Jetstar expands in Asia next, it’s clear the A320/A320neo order will give it the tools to do so.