Mabuhay! Jetstar's Philippine surprise
Jetstar surprised all and sundry last week with an application to the IASC for traffic rights for new flights to the Philippines starting in November 2025. Jetstar plans to operate 3x weekly flights between Perth and Manila, and 3x weekly flights between Brisbane and Cebu, utilising the A321LR.
This is not Jetstar’s first foray into the Phillipines, having briefly operated 3x weekly A320 flights between Sydney and Manila via Darwin (in 2011), and Darwin-Manila-Tokyo between 2012 and 2014. In hindsight, these seem rather exotic! In order to help contextualise Jetstar’s move let’s have a brief look at the Australia-Philippines market as well as Jetstar’s emerging A321LR strategy .
Australia-Philippines market
The Australia-Philippines market has grown impressively in recent years with the long term trend showing 48% growth over the last decade. 2024 was a record year with 440,930 arrivals in Australia from the Philippines, up 13% from 2023 and 7% higher than 2019. On a net basis, 92% of arrivals were on direct flights in 2024, also having increased from 78% a decade ago highlighting strong and growing O&D demand between the countries.
Australian residents made up 60% of the arrivals in 2024, having declined from 70% a decade ago. Interestingly, this is despite a growing Filipino migrant community in Australia. For example, the 2021 Australian Census estimated 293,892 people resident in Australia having been born in the Phillipines, compared to 232,384 and 171,233 in 2016 and 2011, respectively. Instead, we might attribute this to rapidly growing Filipino tourism and VFR traffic to Australia. These trends likely inform the demand mix that airlines must consider.
Qantas operate long standing daily A330 Sydney-Manila flights and a recently introduced 4x weekly Brisbane-Manila flight. Philippine Airlines (PAL) operate daily flights from Manila to Brisbane, Melbourne and Sydney (with some seasonal reductions) and recently launched 3x weekly flights to Perth. Notably PAL use of a variety of aircraft including widebodies and the A321LR that has enabled the opening of new routes.
Cebu Pacific are the most recent entrant into the market with daily Manila-Sydney flights and 4x weekly Manila-Melbourne flights utilising a high-density 459 seat all economy A330neo. This has allowed Cebu Pacific to grow its market share to 34%, eroding both PAL and Qantas’s market shares. Since Cebu Pacific’s entry in 2014, PAL’s market share has declined from 58% to 48% despite passenger numbers increasing 104%. Similarly, Qantas’s market share declined from 30% to 18% despite their passenger numbers increasing 46%, highlighting the strong market growth.
Obviously PAL and Qantas have different strategies to Cebu Pacific, the latter being a true low cost carrier. Both full service carriers seek to generate higher yields from the premium classes but also utilise their hubs to drive network traffic while Cebu Pacific focus on a volume driven O&D market. Cebu’s proficiency in utilising Manila as a connecting hub also shouldn’t be ignored despite it being a LCC.
Jetstar’s entry allows Qantas to segment traffic at a group level, pushing lower yielding traffic onto its lower cost platform. We’ve previously discussed this strategy at length elsewhere.
Enter Jetstar and its evolving A321LR strategy
Jetstar’s introduction of the A321LR has been a crucial addition to the Qantas group. We’ve gone as far as describing it as a “saviour” in the post-pandemic era as its rapid introduction to Jetstar’s Bali routes allowed the redeployment of the B787s to longer routes into Asia. In some cases taking over routes from Qantas and partially covering their short term widebody fleet shortages.
While the first phase of the A321LR introduction was almost exclusively focused on Bali, a second phase focused on a wider range of new and existing routes with the A321LR being deployed across Tasman and Pacific routes. Another feature of this phase was the opening of new routes from Perth including Bangkok, Phuket and Singapore.
The longest of these routes are Perth-Bangkok at 2,864 nm, Sydney-Rarotonga at 2,695 nm and Perth-Phuket at 2,599 nm, all significantly longer than the initial Bali routes (longest being Sydney-Bali at 2,494 nm). The newly announced Philippine routes come in at the longer end of the spectrum, with Brisbane-Cebu and Perth-Manila at 2,820 and 2,791 nm, respectively, making them Jetstar’s 2nd and 3rd longest A321LR routes.
The Perth-Manila route is the least surprising given Qantas’s significant capacity into Manila and PAL’s existing Manila-Perth flights. Since the (re)introduction of the route in March 2023, PAL has attracted a 75% load factor (78% inbound and 73% outbound) although this is likely affected by payload restrictions as PAL’s A321neo’s are not equiped with the LR’s additional fuel tanks and increased MTOW.
More surprising was the addition of Brisbane-Cebu. Why Brisbane and not Sydney or Melbourne, and why Cebu and not Manila?
Firstly, there are the operational range limitations of the A321LR. As we’ve already established, Brisbane-Cebu will become Jetstar’s 2nd longest route at 2,820 nm. Melbourne or Sydney to Cebu would come in at 3,099 and 3,067 nm, respectively, far exceeding the viable range. Meanwhile, Brisbane-Manila would come in at an even longer 3,125 nm.
Secondly, Cebu is a legitimate destination in its own right. It’s seen significant growth in international carriers with most major Asian carriers operating to/from Cebu and more recently the long haul flights by Emirates, Qatar, Turkish Airlines and United Airlines. Concomitantly, Jetstar may be preempting flights between Cebu and Australia by PAL or Cebu Pacific.
Where next for the A321LR?
These new routes are certainly the most innovative new international routes by the Qantas group and highlights the promise of the A321LR and even A321XLR’s longer range. Looking into the crystal ball, where might the A321LR be headed? With several more on order, Jetstar have the opportunity to expand medium to long haul flying.
Utilising a 2,900 nm range envelop, Jetstar are likely able to reach New Zealand from Perth as well as existing Jetstar stations in Vietnam (Ho Chi Minh City). Speculatively, other options include Jakarta in Indonesia, Kuala Lumpur in Malaysia, Phnom Penh and Siem Reap in Cambodia, although some are well within range of Jetstar’s A320s. A good cheat sheet is to look at Jetstar Asia’s destinations, especially those timed to connect to/from Jetstar and Qantas’s Singapore flights.
However, the A321LR isn’t going to take Jetstar to India, South Africa or Sri Lanka, destinations that Jetstar have been thinking aloud about. They’re also not going to take Jetstar to their existing Korean or Japanese destinations.
Meanwhile, using the same 2,900 nm envelope from Brisbane doesn’t open up too many interesting options, again falling short of Japan, Korea, Singapore, Thailand and Vietnam. This would place Adelaide, Melbourne and Sydney in the same pot.
The A321LR’s range capabilities fall short of opening up large swaths of SE Asia for Jetstar, however further deliveries will enables incremental capacity increases and several new opportunities, particularly from Perth. Further medium- to long-haul expansion will have to wait until delivery of Jetstar’s A321XLR that will significantly increase the range envelop.
Where do you think Jetstar will be taking the A321LR and XLR?