Title
Jetstar Asia Airways

1. Introduction
This report will be analyzing Jetstar Asia Airways Pte Ltd. The report consists of the PESTEL model and Porter's 5 Forces model for an in-depth analysis of Jetstar Asia Airways Pte Ltd. In the report, there will recommendations on diversifications strategies for the company and a conclusion summarizing up the report.

Jetstar Asia Airways Pte Ltd is based in Singapore. It is owned by Westbrook Investments and Qantas Group Holdings (Jetstar, 2014). Jetstar Asia Airways first flight was to Hong Kong on 13 December 2004 (Jetstar, 2014) and main objective of the company is to be the top in providing flights with low prices to consumers within South East Asia. Jetstar Asia Airways owns eighteen jets and provide daily frequent trips to 23 countries such as Bangkok, Thailand. They are the largest low cost carrier in the Asia Pacific by revenue (Jetstar, 2014).

2. Discussion
2.1 General Environment Analysis
2.1.1 Political Factor Political factors are decisions and policies the government implement, which would have a major influence over companies (Gomez-Mejia, L., & Balkin, D. , 2012). For example, the government in Singapore, Ministry of Manpower, exercise some degree of control and influence over the hiring and firing of employees. Singapore Changi Airport charges landing charges for $1,200 per landing. There is also parking charges for aircraft with is charged from range of $49-97 depending on the span of aircraft and length and additional charges will be added on for continuous period of parking (Changi Airport Group, 2014). There are no airport taxes for airlines and it can be taken advantage of. This is an opportunity where Jetstar is able to prevent spending on. The policies in Singapore are usually established and will not be changed for a period of time.

2.1.2 Economic Factor Economic factors are companies affected by the countries' economic in the area (Gomez-Mejia, L., & Balkin, D., 2012). The growth(GDP) of a country, which affects employment and the ability to generate profits for long-term plans. It is usually present in day-to-day of running a business (Gimbert, 2011). As Jetstar heavily relies on the economics of the country, economic crisis or recession from other countries will have a major impact on the company. If there are financial crisis or recession, customers or people of the region will not be keen to travel and will impact the revenue. For example, in 2008, due to the global financial crisis, there was a decline in tourists’ arrivals of 4.3% and the visitor days declined 4.1% (Department of Statistics Singapore, 2014). This can be an opportunity for Jetstar Asia Airways. When there is crisis or recession, people tend to spend lesser. This will lead to the need to find a cheaper option to travel. Hence, people will look for low cost airlines to get to places. Companies who are sending their employees overseas may also see this as an cheaper alternative. This will definitely benefit the company.

2.1.3 Social Factor Social factors are areas that impact the company by the countries' norms, culture and style of living (Gomez-Mejia, L., & Balkin, D., 2012). Social factor relates values, attitudes, demographic characteristics of the citizens (Byars, Rue & Zahra, 1996). Singapore has its own set of values compared to other countries. However, due to the influence of the internet, the set of values and culture is changing. Singaporeans have the mindset of saving and be thrifty. With that mindset, they would prefer the low cost flights and having more money to spend overseas. Customers going overseas with their family would also prefer low cost flights. Furthermore, the trends in Singapore are more and more teenagers are travelling overseas with their friends. Usually, teenagers would prefer budget airlines. This is an opportunity for Jetstar.

2.1.4 Technological Factor Technological Factors are where technology affects the way a company function and how the company adapts to new environment (Gomez-Mejia, L., & Balkin, D., 2012). It is how the company uses the knowledge and makes new products, which would attract customers. It not only revolutionize the lives of people, but also improve the methods, materials and design we use (Griffin, 2011).

In Singapore, it is definitely technology-driven. Nowadays, majority of Singaporeans own a smartphone. This leads to getting of information online easily, effectively and efficiently. By using this knowledge, Jetstar Asia is able to use internet as a source of sales or even customer service. This would save not only the customer’s time, but also will save cost in labour. From Jetstar's official website, the company goes an extra step to work in close liaison with hotels and car services in various countries it flies to. It provides a “full package" feel to the customers. In addition, with the infrastructure build by the government, there is wireless hotspot that allows anyone to connect to it and be able to access the internet, an example of such places is airport.

2.2 Competitive Environment Analysis (Porter’s Five Forces)
2.2.1 Threat of New Entrants Threat of New Entrants refers to the probability of a new company entering the same industry. It can also be companies already in the industry trying to expand into a specific area. New entrants that wants to gain shares in the area of industry and put stress over all the prices or costs to compete with existing companies (Porter, M., 2008).

The threat for new entrants is high. Jetstar Asia Airways is a low-cost aviation provider. Airlines with strong establishments can come up with strategies to target this area. A good example for the case mentioned above is Singapore International Airlines setting up Scoot Airlines to aim for low price services. Airlines around the world that see Singapore as a country with opportunities as people living in Singapore have spending power and would prefer low cost when travelling.

2.2.2 Bargaining Power of Suppliers
Bargaining Power of Suppliers refers to the prerogative of the suppliers. The supplier is usually reputable in certain areas or the only company that produce certain materials. However, this trends change over time for different cases. E.g. Travel agents relying on tickets sales. With technology coming into the picture, airlines are able to sell to customers directly. The threat for this case is low. In this case, we will look into two different areas that are required for the company to work, the aircraft and the fuel supplier. Firstly, the company will source for new aircraft for the plane. For this, the bargaining power of suppliers is considered low due to the options that the company have. Some examples of company that produce commercial aircrafts are Airbus and Boeing. With the options in hand, the company is able to choose the cheapest within the range of options. Secondly, the aircraft will require fuel. The bargaining power of suppliers can be considered as low as well due to the options for fuel supplies. There is more than one supplier in Singapore that is able to provide such service. Similarly to purchasing of aircraft, the company has different options to choose from. 2.2.3 Bargaining Power of Buyers
Bargaining power of buyers refers to the prerogative that the buyer holds. Usually, buyers with more options on hand will have more power to choose from.

The threat for this case is high. For Jetstar case, there are other airlines that provide low budget flights that get the same job done. Buyers are able to choose from the list of options and decide to go with whichever favours them more. Moreover, with the internet, there are websites that directly compares different airline prices with each other and show the cheapest prices for the particular day, venue and time.

2.2.4 Threat of Substitutes Threat of substitutes means of other kind of service that will replace the companies service. For example of a product being replaced is the pager to mobile phone transition.

The threat for this case is low. Even though there are different forms of transport like cars or ferry. However, there are limitations to it. In Singapore, we are limited to the places we can drive to. It takes a lot of time to get to the designated area and fuel is expensive. An example is driving to Kuala Lumpur, Malaysia. It requires 6-8 hours to reach by car. By taking a plane, it cuts down the travelling time to 1-2 hours. It is also hassle-free and more comfortable to travel. Jetstar provides services to Kuala Lumpur at rates like $34 as seen from figure 1.1 (Booknow Jetstar, 2014). If we were to calculate the fuel consumption of a car, it would be more expensive to travel by car.

Figure 1.1 Even though there are also full service airline, such as Singapore International Airlines, customers would find it costly and will prefer to find cheaper alternative.

2.2.5 Competitive Rivalry Competitive Rivalry means other companies in the industry trying to increase their value and profits.

The threat for this case is high. In the airline industry in Singapore, there are different budget airlines which are competing with Jetstar. Some examples are Tiger Airways and AirAsia. This allows the customers to choose from the cheapest flights and will be jumping across different airlines. This also leads to the problem of not utilizing the fully capacity of the aircraft, which leads to wasting of resources.

2.3 Key Threats and Opportunities
In 2012, there were 14.5 million tourist arrivals. In 2013, there were 15.5 million tourist arrivals (Department of Statistics Singapore, 2014). As from the statistic, the trend of the rate of tourist visiting Singapore will definitely increase in the future years. Jetstar Asia Airways will be able to capitalize on this trend to increase their sales. Tourist that comes to Singapore may also want to travel countries around Singapore. This creates more opportunities to expand the companies’ market. Also, the company can create packages for family vacations for locals in Singapore.

Fuel is one of the key threats for Jetstar. The price of fuel has been increasing over the past few years. This makes future planning difficult as the fuel prices are estimated. Another key threat for Jetstar Asia Airways is unforeseen viruses such as Severe Acute Respiratory Syndrome (SARS) and Influenza A (H1N1) hitting regions that the company operates in. The percentage of tourist travelling will decrease due to the risk of contracting the virus.

3. Recommendation
3.1 Diversification
The suitable diversification strategy recommendation for Jetstar Asia Airways is by Concentration strategy. Concentration strategy focuses on the sole area of the business of the company (Gomez-Mejia, L., & Balkin, D., 2012).

For Jetstar Asia Airways, the best way is to create more flight routes. This allows more sales as customers have more options of where they want to go. Furthermore, by increasing more flight routes, Jetstar is also able to cover destinations that other competitors didn’t. However, by increasing the number of flight routes, Jetstar needs to purchase more aircraft to cater for the demand. This strategy allows the company to plan ahead for future.

4. Conclusion In conclusion, Jetstar is able to find opportunities within some factors discussed. One is the economic crisis which buyers seeks cheaper alternative. The other factors are high chances of new competitors entering the aviation industry, the fuel prices increasing and the power that the buyers have. With this in mind, Jetstar will alter their strategies to accommodate and solve the issues.

Reference List
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Porter, M. (2008). The Five Competitive Forces That Shape Strategy. Harvard Business Review, 79-93.

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Qantas Announces Profit Results,. (2014). Profit Report on Qantas. Retrieved 16 June 2014, from http://www.jetstar.com/mediacentre/latest-announcements/~/_media/B6B3274399254E4CB5FB5B154A5AABC2.pdf