Could Vietnam Airlines be Qantas Jetstar Pacific’s next partner?
Radio Australia recently interviewed UK Financial Times Vietnam
correspondent Ben Bland and he says Qantas is currently in negotiations with the
country’s flag carrier Vietnam Airlines for a joint venture between Jetstar
Pacific and Vietnam Airlines.
Given that Vietnam Airlines has just signed up to the Skyteam
Airline alliance and Qantas/Jetstar are in oneworld this partnership may seem
an unlikely business partnership but reading further into the Radio Australia transcript
the partnership would be a win-win for both carriers.
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.”
Jetstar Pacific is 27% owned by Qantas/Jetstar Australia and
the rest 73% is owned by two Vietnamese state owned company’s the deal would
see the 73% transferred to Vietnam Airlines.
AirAsia was was set to establish a joint venture with
VietJet, however earlier this month the Malaysian based airline pulled out,
VietJet is expected to go ahead without AirAsia.
This is what Bland said on the point in his Radio Australia
interview “Jetstar at the moment is 27
per cent owned by Jetstar Pacific, which is a Vietnamese subsidiary, sorry,
it’s 27 per cent owned by Jetstar Australia, and the rest of Jetstar Pacific is
owned by two smaller Vietnamese state-owned companies. The talks that are
ongoing at the moment would see the majority
stake in Jetstar Pacific transferred from those two small state-owned companies
to Vietnam Airlines. So you’d basically see Qantas getting into bed with
Vietnam Airlines, which makes analysts think 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,”
“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.”
Vietnams LLC market is one of the most underdeveloped in
Asia and with explosive growth predicted it is no wonder Qantas is eager for the
deal to go ahead.
If this report is correct we may see an announcement from
Vietnam Airlines and Qantas either later this year or early next year.