It’s becoming clear that Jetstar, on many levels, can no longer be strictly considered a budget or low cost carrier on any other basis than its ‘would you like fries with that?’ fare structure.
Further confirmation came with news Jetstar has signed with TravelSky, the Chinese Global Distribution System. It already has GDS agreements with Amadeus, Galileo, Sabre, Abacus etc.
Low Cost Carriers aren’t supposed to do that. GDS distribution costs extra. Nor should budget carriers, in theory at least, charge higher fares than the so-called legacy airlines. But Jetstar does.
For example, I’ve just bought a return fare to Bangkok through Jetabroad.com.au on Thai Airways for A$878*.
If I had booked the same itinerary on identical dates through Jetstar I would have paid $1152 for the basic fare, not including food, inflight entertainment or a comfort pack (blanket and pillow), for which you pay extra.
Sydney-Phuket on Jetstar was $985 plus, plus for the same dates.
Now many will say one example is not good enough, and they would be right.
But this is not the first, and certainly won’t be the last, time Jetstar is pricing above competitors, especially on the long haul routes.
It’s also happening on domestic where Jestar is often more expensive than Virgin Australia. Sometimes a Jetstar airfare will even cost more than its parent carrier, Qantas.
Don’t believe me? Check a popular city pair like Sydney-Melbourne yourself through a domestic aggregator like Webjet.
The beauty of all this from Jetstar’s perspective is that they own the Australian budget or low cost space – certainly in terms of perception – yet are able to charge relatively high fares on key routes, especially when you factor in the extras passengers have to pay for.
It’s a brilliant strategy. Advertise your cheapest fares, which sell out in an instant, and then sell the higher fares.
Jetstar is in a sweet spot now and with a lack of competition – Tiger Airways may be back but is toothless – could be in that space for a very long time.
* The Jetabroad.com.au was actually about $100 less than Thai Airways was selling it for on its website.