Qantas eyeing Vietnam Airlines deal


Reports from Vietnam indicate that the Qantas low-cost subsidiary Jetstar Pacific is well advanced in negotiations to join forces with Vietnam Airlines. 


AirAsia recently decided to pull out of Vietnam, citing government restrictions on foreign airlines using their brands on domestic routes. Jetstar has faced similar problems in Vietnam.
Interviewed by Radio Australia, Ben Bland, Vietnam correspondent for the UK’s Financial Times, said, “Vietnam Airlines is the dominant player, it has strong political backing and that may be why there’s been so many difficulties for Jetstar and for Air Asia.
â€
Jetstar is 27 percent owned by Jetstar Australia, and the rest by two Vietnamese state-owned companies.
Bland said ongoing talks would see the majority stake in Jetstar Pacific transferred from the two state-owned companies to Vietnam Airlines.
“So you’d basically see Qantas getting into bed with Vietnam Airlines, which makes analysts think that has been at the root of its inability to expand in Vietnam in the past.
“So the problem would potentially become the solution.”
Bland said Vietnam Airlines controls most of the flights in Vietnam, and also has high-level political backing to expand into a regional powerhouse along the lines of Singapore Airlines and Thai Airways.
“In the past, analysts believed that Jetstar and other foreign airlines have struggled because Vietnam Airlines has tried to effectively knobble their expansion in Vietnam,†Bland said.
“Well, if Qantas moves into a joint venture with Vietnam Airlines, which is what seems likely to happen, then it’ll be in Vietnam Airlines own best interests to make the joint venture work, and Vietnam Airlines chief executive has given an interview in the last month where he said Vietnam Airlines is keen to move in to the low-cost market.
“So this deal would seem to make sense to Vietnam Airlines. I think it would also make sense for Qantas/Jetstar which has had a torrid time in Vietnam, but it’s still very excited by the growth prospects here.â€
Ian Jarrett
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