Jetstar, ‘The Orange Gamble’ of the Qantas Group, is finally paying off, writes Tony Harrington
As payback for years of complained about service and unreliability, Australia’s Jetstar Airways was sarcastically nicknamed ‘The Orange Gamble’ by disgruntled passengers, reflecting both its standout corporate colour scheme and infuriating unpredictability.
The slur stuck, an enduring example of a big brand hijacked for failure to deliver.
Now, one of the biggest challenges for the low-cost carrier of the Qantas Group is convincing customers it’s no longer on the nose, but provably on the rise and undeserving of derision.
That was then. This is now. Come and see.
Since the pandemic subsided, and travellers surged back in unexpected numbers, particularly for leisure, Jetstar has inducted a steady flow of new, more efficient and more capable aircraft. That has enabled it to expand its operations within Australia, to and within neighbouring New Zealand, and ever further into the encircling markets of Asia and the South Pacific.
It has also ended excursions into marginal offshore ventures, exiting underperforming Jetstar franchises in Vietnam and Singapore, and in January announcing its intention to offload its one-third stake in Jetstar Japan by mid next year. The latter carrier will be rebranded and, for the first time, entirely locally owned.
Critically, under the guidance of CEO Stephanie Tully, Jetstar Australia has also pursued a parallel and specific focus on improving customer service, not just in the air or at airports, but right back to its digital processes, streamlining travel bookings, ancillary purchases and delivery of personalised flight updates.
And it’s clear the low-cost gamble by full-service Qantas is finally paying off with Jetstar surging operationally, financially, and presumably reputationally as its business grows and grows.
Positive trajectory
Since Tully’s appointment in 2022, after 18 years with Qantas, and as the entire airline industry emerged from the pandemic, Jetstar’s trajectory has been steeply positive.
Its annual revenues from domestic and international operations have risen consistently, quadrupling since 2022 to A$5.7 billion ($4 billion).
Profitability improved too. In its 2025 financial year alone, Jetstar’s underlying earnings before interest and tax (EBIT) increased 55% year-on-year to A$769 million as it lifted capacity 17%. That was supported by passenger seat factors climbing from 86.8% to 88.3%.
The trend continued in the first half of 2026, with revenues up 8% to A$3.6 billion and underlying EBIT improving 12% to A$492 million. Domestic operations soared, with more than 8.5 million passengers and an EBIT of A$372 million, while Australian international earnings were up 9% for the half with almost 600,000 additional passengers and load factors rose further to 89.3%.
“Around 60% of Jetstar’s increase in profitability in the half was driven by its new aircraft, through a combination of growth, new network opportunities and the redeployment of existing aircraft onto other routes,” said Qantas Chief Executive Vanessa Hudson.
Multiple requests over three months to speak to Jetstar’s CEO were declined, explained by a punishing schedule, or, as some suggested, maybe just a desire to stay under the radar lest interviews inspire new snipes.
Still, credit where credit is due, the airline is flying high, even if its story is left to others to tell.
When she switched jobs, Stephanie Tully’s task was not just to rebuild Jetstar after Covid, or to progress growth enabled by the arrival of new jets ordered by her predecessors.
It was also to convince customers that low cost did not mean low quality.
Tully took over in the worst of times, when the Qantas Group, particularly its principal airline, was mired in post-pandemic operational and reputational crises which ultimately consumed CEO Alan Joyce – who was also Jetstar’s first CEO.
“When Jetstar originally started, it was all about value and cost and price,” said one former Qantas executive. “They didn’t really have the customer as one of their strategic pillars.”
First flights
Its first flights were in 2004, using old Boeing 717s which Qantas gained when it bought failing LCC Impulse Airlines three years earlier, in part to defend against the cocky and surging newcomer, Virgin Blue, but also to make Qantas more efficient.
Initially, Jetstar was directed to unprofitable Qantas routes including Tasmania and the Gold Coast, where full-service flights were replaced by budget product, causing passenger revolt and Qantas staff fear and fury over lost jobs.
As well, Jetstar employees, many paid less than their Qantas counterparts, and constantly criticised for their airline’s failings, took little pride in the carrier.
“Steph has cleaned all of that up,” said the ex-Qantas exec. “She came in with a fresh approach. She has a very natural style. And there’s real pride now amongst the staff.”
Tully focused on creating a vibrant new culture, he said, introducing new uniforms, greater focus on service, and more diverse, energised staff, while building strong ancillary revenue streams and adding benefits including Qantas lounge access and the ability of Jetstar passengers to earn and spend Qantas frequent flyer points.
“A lot of that past stuff is now forgotten with new generations of travellers. It’s starting to look like a really smart carrier with a level of independence and with brand advocacy now coming through from the customers.”
Others cite changing market conditions and passenger preferences as drivers of Jetstar’s turnaround. They say Jetstar is riding a wave, not creating one.
“Demand for low-fare passenger transport has grown amid a cost-of-living crisis,” said Andrew Ledovskikh, Lead Analyst covering the Australian aviation sector for industrial research group IBISWorld.
“Weak purchasing power has prompted consumers to seek out budget airfares. This has spurred revenue growth for low-cost carriers and increased the share of revenue generated from additional fees and surcharges.”
Failing competition
As well, the failures in 2024 of two low-cost Australian airlines, Bonza and the intercity experiment of regional airline Rex, created further opportunities for Jetstar to consolidate its place as the low-cost leader, complementing the Qantas strategy to dominate the full-service segment, and trapping Virgin Australia in between.
“Steph is certainly a popular leader, by all accounts well-liked by staff. But that alone doesn’t make her successful,” added Peter Harbison, the Sydney-based founder and former owner of CAPA – Centre for Aviation, and a veteran observer of the region’s airline sector.
“Heading Jetstar is a complex role that’s evolved over the years. As an increasingly important limb of a dual brand airline, coordinating and cooperating closely with the Qantas team is vital too. Steph’s array of skills would seem to equip her well on all counts.”
Harbison added: “Jetstar is progressively taking on a bigger role in the group, both domestically and on regional international routes.
“Internationally, Qantas is focusing on the longer-haul routes where there is less competition and more business traffic, while Jetstar is growing in Asia, where low-cost competition is rife and the growth market is lower yielding.”
Last year, Jetstar activated or announced 14 new routes, four of which were launched within a week in Q4 – two international, two domestic – while a new service between Melbourne and Colombo, Sri Lanka, was announced a week later and is due to commence in August.
By 30 June this year, Jetstar Australia expects to be flying 119 routes, up by 12 in 12 months, with a mix of narrowbody Airbus A320-family jets and long-range Boeing 787-8 Dreamliners.
It will also have increased capacity on many existing routes, permanently or seasonally, though closing Jetstar Asia and exiting Jetstar Japan will lower the group’s international activity.
Central to the core Jetstar’s ascent has been the arrival of longer-range, more efficient A321LR and smaller A320neo jets, enabling improvement and expansion of its point-to-point model in and between Australia and New Zealand and to ‘mid-range’ international destinations.
It has just ticked over 100 aircraft and continues to grow. By mid-year, Jetstar Australia will have added almost 30 A321LRs since 2023, five A320neos since 2024, and nine ex-Jetstar Asia A320s, six replacing jets returned to lessors, a net gain of three.
The LRs have opened routes either too long for older narrowbodies or unviable or sub-optimal for widebodies, as well as upping capacity and efficiency on existing routes.
A key beneficiary of the fleet renewal and expansion has been the Indonesian resort island of Bali, a signature destination for Jetstar, and to Australian travellers what Ibiza is for holidaying Brits, or Cancun to Americans.
From April, Jetstar will operate up to 105 flights per week between Bali and 11 Australian destinations, plus Singapore three times a week.
It also operates 16 Australia–New Zealand routes, up to 89 flights per week versus 74 last year, as well as domestic services there.
And with range up to 7,400 kilometres, the LRs have enabled new international routes including Perth to Manila, Bangkok and Phuket, Brisbane–Cebu, Melbourne–Fiji and Sydney–Rarotonga in the mid-Pacific Cook Islands.
Dreamliners refreshed
But the biggest changes are still to come, with Tully foreshadowing late last year “a huge growth phase” for her airline.
One key driver is the refurbishment of its 11 B787s to enable flights of up to 16 hours.
Although the 787-8 is the longest-range version of Boeing’s Dreamliner family, Jetstar has historically used them on routes of six to 10 hours between Australia and destinations including Bali, Singapore, South Korea, Bangkok, Phuket and Honolulu, the latter now discontinued.
To facilitate their deployment on much longer routes, a rest area will be installed above the rear Economy cabin with lie-flat beds for crew to take breaks, enabling them to fly much longer sectors without exceeding their regulated duty hours.
Business Class cabins will grow from 21 seats to 44, Economy will be upgraded with new seats and power charging ports, and WiFi will be installed on the Boeings, the first of which is now being refurbished in Hong Kong.
The first new route announced for the renovated 787s is Melbourne–Colombo, enabling Jetstar to tap into an evolving tourism market and a busy two-way route for Sri Lankan nationals, while India, South Africa and Las Vegas are among potential new markets.
But arguably the biggest development will come late next year, when Jetstar introduces the Airbus A321XLR, enabling even longer deployment than the LR and on routes not viable for the 787s or freeing them for more profitable use.
The XLRs, the longest-range narrowbodies in service today, will enable two-class flights on routes of up to 8,700 kilometres, or 11 hours, currently served by widebody jets, linked via interim airports, or not served at all.
This opens prospects of nonstop narrowbody flights from Melbourne, Sydney, Adelaide or Brisbane to destinations as far as Hong Kong, Bangkok, Phuket or Cambodia, while from Perth XLRs can easily reach China, India, Sri Lanka, Mauritius, New Zealand and South Pacific nations.
As well, said Mayur Patel, Head of Industry Affairs, APAC, for the global aviation data group OAG, there’s another huge opportunity when the curfew-free Western Sydney International Airport opens late this year at Badgery’s Creek, 51km from Sydney’s heavily constrained main airport, serving a local catchment area exceeding 3 million people.
Jetstar plans to base 10 aircraft at the new hub, offering not only direct flights between Western Sydney and key domestic destinations, but potentially international links.
“The A321XLR’s 8,700km range makes marginal routes commercially viable for secondary Asian cities, Pacific Islands, and Southeast Asia from both Western Sydney and existing bases,” said Patel, “with late-night and early-morning departures allowing passengers to sleep while travelling to destinations that couldn’t support 787 frequencies.”
Product upgrade
Jetstar’s product is also evolving in line with other prominent LCCs across the region including AirAsia, India’s giant IndiGo, and Singapore-based Scoot, the latter the low-cost sibling of Singapore Airlines, with a similar relationship to Jetstar-Qantas.
“As LCCs increasingly push into longer-haul and ultra-long-haul markets, many pure low-cost models are expected to evolve toward hybrid offerings,” added Patel.
“The pure ultra-low-cost model won’t work at 8-plus hours. So Jetstar’s two-class configuration of 44 business seats on refurbished 787s and two-class on all XLR routes represents pragmatic evolution maintaining LCC cost discipline while acknowledging passengers pay for comfort on long sectors.”
Jetstar might have started as a gamble. But it is proving to be a sound bet.
