Another history was recorded yesterday where the world’s first budget airline alliance was forged yesterday between AirAsia and Australia’s Jetstar. The alliance will enable both companies to pool resources and expertise, procure new aircraft and revenue-sharing deals which could lead to cost savings of between A$200mil and A$300mil annually.

Other than the cost saving of which will only be materialized 16 months from the signing date, what can we expect as the customer from this deal.? Based on what has been reported in the media, I summarized as follows :

• Negotiating on how they can procure fuel in bulk for the needs of both carriers in markets that we operate in and this will lead to significant savings for us.
• Sharing spare parts and that is a big (area for cost savings)
• A key component of the agreement is its ability to influence aircraft makers to manufacture robust planes that suit the LCC specifications as most planes made today are more suited for full service carriers and remodification costs a lot more. Qantas Airways Ltd CEO Alan Joyce, who was at the press conference, said the parties “have the purchasing power to influence aircraft makers’’ to design the next generaton of narrow body aircraft for the LCC industry.
• The next step for the partners would be to look at joint venture on routes and other commercial actitivies including joint procurement of hotel inventory for holiday packages.
• Whether AirAsia X gets to fly the controversial Kuala Lumpur-Sydney route which has been dropped by Jetstar a year ago as they focused on Tokyo route.
• Are we able to Fly to Tokyo through AirAsia X alliance JetStar !

We just wait and see how they going to make all this happen.

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