Jetstar's aspirations to expand in Asia have been boosted with Singapore's competition watchdog clearing the way for the budget airline's offshoots in the region to coordinate passenger and cargo services.
But in a sign of the tough business environment, the International Air Transport Association has trimmed its forecasts for combined airline earnings in the Asia-Pacific by $US1.5 billion to $US3.1 billion for this year.
The peak airline body blamed slower growth in the emerging economies for the lower forecast.
But in 2014 it expects airlines in the region to experience a modest improvement in profits to $US3.6 billion, mainly because of a pick-up in demand for cargo, growing demand in China's domestic market and the benefits of industry restructuring in Japan.
Jetstar's biggest flying operations are in Singapore but it also has joint ventures in Japan and Vietnam.
It also is seeking approval to launch services from a new base in Hong Kong.
Jetstar gained approval from the Competition Commission of Singapore to co-ordinate with its regional offshoots on matters such as flight scheduling and pricing, despite "some parts" of the plans raising competition concerns.
Highlighting that budget airlines often increased competition on air routes, the Singapore watchdog said those concerns would be offset by economic benefits.
The decision will also allow Qantas to better co-ordinate services with Jetstar's network.
It follows the Australian regulator giving approval in March for Qantas and Jetstar to co-ordinate with the budget airline's joint venture operations across Asia for the next five years.
The Australian Competition and Consumer Commission said at the time that the better co-ordination of passenger and cargo services posed "little, if any, detriment" because the airlines faced stiff competition from other carriers on the mostly intra-Asian routes.
The clearance in Singapore comes as Jetstar awaits a decision from regulators in Hong Kong about whether to approve its plans to launch operations from the Chinese territory.
Jetstar has faced stiff opposition to its plans from Cathay Pacific, its offshoot Dragonair and Chinese-backed Hong Kong Airlines.
Cathay chief executive John Slosar has outlined its case against Jetstar in his airline's magazine, arguing that "granting a licence to what is essentially a franchise of a foreign airline . . . would actually break the law".