The proposed partnership between AirAsia Bhd and Jetstar is almost complete and the deal is expected to be announced in the first week of January. A media conference has been scheduled on Jan 6 in Sydney. Both parties and Qantas (Jetstar’s parent company) will announce the details of a strategic agreement and how these parties will work “innovatively together’’ so as to drive greater cost efficiencies across AirAsia and Jetstar.
AirAsia is Asia’s largest low-cost carrier whose unit cost is the lowest in the world. It flies to over 61 domestic and international destinations with 108 routes, and operates over 400 flights daily from hubs located in Malaysia, Thailand and Indonesia. Its sister airline is AirAsia X which began flights to Australia in 2007 and has expanded to China, Britain and the Middle East.
The Jetstar group includes wholly-owned Qantas subsidiaries operating from Australia and New Zealand, partner carriers including Jetstar Asia and Valuair in Singapore and Jetstar Pacific in Vietnam. Jetstar Asia/Valuair is 51% owned by Westbrook Investments Pte Ltd and 49% owned by Qantas, which in turn has a 27% stake in Jetstar Pacific in Vietnam. The Jetstar group operates 1,900 weekly flights to 15 countries.
How the eventual partnership will pan out is unclear, but given the challenges the aviation industry faces, partnerships and mergers are not new and if parties can pool resources for greater efficienies, it helps airlines in difficult times. One route that may be shared is the KL-Sydney sector which AirAsia has failed thus far to get rights to ply. Jetstar, even though it has stopped plying the route since September 2008, has the rights. Will that rights be shared by AirAsia? The Kangaroo route (from any Australian point to KL and on to Europe) is a possible route that these airlines will capitalise on and with the partnership, AirAsia will be able to offer connectivity all over Australia via Jetstar Australia and it can take Jetstar’s passengers to Europe, India and the Middle East where Jetstar is not flying.
Via TheStar
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