Jetstar and Vietnam Airlines to manage Jetstar Pacific Airlines

22 Feb 2012

Jetstar has signed a new partnership structure agreement with Vietnam Airlines for the management of Vietnam-based, state-owned, low-cost carrier, Jetstar Pacific Airlines. Vietnam Airlines will become the largest shareholder in the partnership (69 percent) while Jetstar’s parent company – the Qantas Group – holds a 30 percent share, up from 27 percent previously, retaining its position as the second largest shareholder.

Under the new arrangement, Jetstar Pacific, which currently serves seven domestic destinations, will expand to include international routes while continuing to operate on a low-cost carrier business model. The partnership will also see fresh capital injected into the carrier that will be directed towards fleet revitalisation: the carrier’s fleet of five Boeing B737-400 aircraft will be replaced with new Airbus A320 aircraft by mid-2012.

Chief executive of the Qantas Group, Alan Joyce, said: “This partnership brings together the proven low cost model of Jetstar with the unique local knowledge and existing networks of national carrier, Vietnam Airlines.

“We are confident this partnership can replicate the success of our Qantas and Jetstar strategy in Australia, and follows our recent partnership with Japan Airlines (JAL) to form Jetstar Japan.” The carrier’s partnership with JAL was announced last year (see story here).

Jetstar isn’t the only carrier to partner a low-cost carrier with a full-service carrier. Across Asia, several similar partnerships have been sprouting up not only to boost travel but also to meet remarkably growing demand in a highly competitive market. In the past year, All Nippon Airways (ANA) launched it’s own low-cost subsidiary, Peach Airways, which is scheduled to begin services in March (see story here). Alongside this, ANA has also entered a partnership with AirAsia to launch AirAsia Japan in August (see story here). Meanwhile, Singapore Airlines is extending its own arm into the low-cost carrier field with Scoot, due to begin services later this year (see story here).

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Alisha Haridasani

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