Jetstar Group chief executive Jayne Hrdlicka has defended the low-cost carrier's investments in Asia, saying the region represents a vital part of the future of the airline over the long term.
"We can sit back and dismiss all of this as an Asian distraction or we can play an active role in the world's largest growing aviation market, and that is our choice," she said at the CAPA Australia Pacific Aviation Summit on Friday, responding to critics of the investments, which have been mostly loss-making to date. "Asia is anything but a distraction."
Jetstar has arms in Singapore, Vietnam and Japan and is seeking approvals to set up Jetstar Hong Kong. In February, it froze growth in its Singapore arm as a result of tough market conditions that have led to losses.
"It was a clear signal the market was overcooked," she said. "All low-fares carriers in Singapore have since announced similar moves. South-east Asia is on the path to correction, which is great."
Ms Hrdlicka said the outlook for Jetstar Japan, which has been operating for two years, was particularly bright. The carrier is now the fourth largest domestic carrier in Japan in a market that grew by more than 8 per cent last year as a result of the introduction of budget airlines.
However, Jetstar Japan has yet to produce a profit. Ms Hrdlicka said Jetstar was realistic about the ability of the Asian ventures to do so within a few years of starting up.
Jetstar has a minority stake in all of its Asian ventures to enable it the ability to access international air rights. It has a seat on the boards of the carriers, but independent management teams report to the board.
In Hong Kong, Jetstar has faced lengthy regulatory approval delays in setting up its local arm amid opposition from rival Cathay Pacific. Earlier this year, the venture sold three of its nine aircrafts and the board is understood to be considering the sale of three more.
"Hong Kong has taken us much longer than we expected, but we are still passionate and committed about Jetstar Hong Kong," Ms Hrdlicka said. "If approved Jetstar Hong Kong will address huge pent up demand for low fares in the Hong Kong market."
Mike Mrdak, the secretary of the Australian Department of Infrastructure and Regional Development, said the government was seeking the ability for local carriers to use Hong Kong as a hub, along with regulatory approval of Jetstar Hong Kong, before it will allow Cathay Pacific to increase flights to Australia.