Australian-owned Jetstar will expand its Singapore operations to create its largest regional hub.

Changi Airport Group and Jetstar signed an agreement Thursday to launch a strategic partnership that will see Jetstar continue to make Singapore Changi Airport its largest air hub in Asia for both short and long haul operations. It had previously considered Ho Chi Minh in Vietnam where its Jetstar Pacific joint venture is based.

As part of the agreement, Jetstar will operate its highest number of services and base its largest number of A320-family aircraft in Asia at Changi. It also commits to introduce long haul services using wide body aircraft out of Singapore.

Under the three-year agreement, the Jetstar Group – which includes Jetstar in Australia and Jetstar Asia/ Valuair based in Singapore – is committed to increase existing flight frequencies and offer more destinations from Singapore.

Jetstar’s projected growth at Changi will include additional A320-family narrow body services and, for the first time, wide-body A330-200 medium and long haul flights to and from destinations in Asia and beyond. Jetstar also aims to grow the percentage of transit and transfer traffic through Changi among its passengers.

CAG will support Jetstar’s continued growth at Changi Airport with various incentives under the Changi Airport Growth Initiative which was introduced on January 1. The incentives will enable Jetstar to lower its cost of operations at Changi. It will also receive additional incentives for launching services to cities not currently connected to Changi. This will provide more offerings and new exciting destinations for passengers travelling via and out of Singapore.

As a partner, CAG will work closely with Jetstar to explore route opportunities to grow its traffic out of Changi. CAG will also support Jetstar’s operational needs, such as to improve its ground operations and to enhance the airport experience of its passengers, for example by introducing an early check-in option for Jetstar passengers travelling on the same day.

Welcoming CAG’s partnership with Jetstar, CAG CEO Lee Seow Hiang, said: “We are honoured that Jetstar has chosen Changi Airport to be its largest hub in Asia. We are committed to supporting Jetstar’s growth at Changi by helping it to grow traffic and to keep costs low. By hubbing at Changi, Jetstar will gain from inter-lining opportunities with the many airlines that fly here, including its parent, Qantas, which already uses Changi as an Asia hub.

“For Changi Airport, it will benefit from Jetstar’s increased number of flights and destinations, which will contribute to higher passenger traffic and a stronger connectivity network. And, importantly, this partnership is also beneficial for air travellers in the region who will enjoy a greater choice of low-fare travel options through Changi.”

Lee added, “Our agreement with Jetstar signals CAG’s strong desire to work with our airline partners to grow the pie at Changi. We are ready to develop customised partnerships with airlines based on their business models and growth plans, whether they are full service or low cost carriers.”

Jetstar CEO Bruce Buchanan said the new agreement would support significant growth opportunities for Jetstar and its networks linking Singapore.

“This agreement is most important to us and provides a platform for sustainable future growth throughout Asia,” Buchanan said.

Jetstar operates 408 flights each week to and from Changi, offering its passengers a menu of 23 destinations. Its future planned growth is supported by fleet expansion plans to beyond 100 aircraft by 2014/15.