Jestar Asia profits drop 80 percent as fuel bills and competition increase.

The cost of fuel is is eating into Jetstar Asia’s profits, according to financial reports, which found an 80 percent drop in the airline’s profit due to higher oil bills and competition.

Profit reports lodged by Singaporean regulators revealed Jetstar Asia’s profit of S$4.37 million for the 12 months ending June 2012 were down from S$22.47 million, The Sydney Morning Herald reported.

Although dubbed by Qantas to be one of its most profitable businesses, the airline has accumulated losses standing at S$67 million in 30 June 2012.

In the same period, the airline’s fuel bill went up from S$128 million previously to S$214 million and its operating costs increased 29 percent.

Meanwhile, over the year, competition in the region also increased, with the introduction of the low-cost carrier, Scoot Airlines.

Owning up to 49 percent of the company, Jetstar Asia is one of Qantas’ biggest investments in the LCC market.