Jestar consolidates into Asia
Jetstar is consolidating its presence in Asia as a result of a $50 million deal between parent company Qantas and the Vietnamese Government.
Qantas yesterday signed an agreement to take a 30% in the Vietnam’s second airline, the state-owned Pacific Airlines and it is understood that the name will be changed to Jetstar with plans to also expand its fleet of four aircraft being the subject of talks between Qantas and Vietnam’s State Capital Investment Corporation.
Peter Gregg, Qantas CFO described the deal as offering “great growth potential for aviation”, adding that Vietnam had a large and growing domestic market and was increasingly popular as a tourist destination and the partnership also would strengthen Jetstar’s ability to compete against other low-cost Asian operators, such as Singapore-based Tiger Airlines.
The agreement, endorsed by Qantas buyout group Airline Partners Australia, will see Pacific Airlines switch from a full-service single-class airline to a value-based carrier based on the Jetstar model.
Mr Gregg added that Qantas would partner with SCIC to manage the investment and develop a new business plan and a Qantas management team had already been sent to Vietnam.
Mr Gregg said the partnership would support Jetstar’s growth strategy and help Australia’s national carrier extend its reach into South-East Asia, with Qantas holding a controlling stake in a Singapore-based carrier that also flies under the Jetstar brand and has begun operating long-haul Jetstar services from Australia to Vietnam’s Ho Chi Minh City and other Asian centres.
Pacific Airlines flies from Hanoi to Ho Chi Minh City, to the resort of Da Nang, and also Taiwan and Thailand.
Dr Le Thi Bang Tam, SCICs chairwoman, said Qantas was chosen as a strategic partner because it was one of the world’s best airlines.
Qantas closed down at $5.35 yesterday.
Report by The Mole
John Alwyn-Jones
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