As confirmed several months ago on this site Vietnam Airlines has now taken the majority stake in Jetstar Pacific, along with Qantas increasing its stake in the airline from 27 to 30 precent. Vietnam Airlines will take the majority share in Jetstar Pacific, currently held by the Vietnamese State Capital Investment Corporation (SCIC). Separately, the Qantas Group’s existing 27 per cent share in Jetstar Pacific has now increased to 30 per cent in-line with long-term commitments. Chief Executive of the Qantas Group, Alan Joyce, said the new partnership with Vietnam Airlines would represent an extension of the dual brand strategy pioneered by Qantas and Jetstar, in one of the world’s fastest growing aviation markets. “This partnership brings together the proven low cost model of Jetstar with the unique local knowledge and existing networks of national carrier, Vietnam Airlines,” said Mr Joyce. “We are confident this partnership between a low cost carrier and a full service airline in Vietnam can replicate the success of our Qantas and Jetstar strategy in Australia, and follows our recent partnership with Japan Airlines to form Jetstar Japan.” Chief Executive of the Jetstar Group, Bruce Buchanan, said the strategic partnership with Vietnam Airlines would strengthen Jetstar Pacific’s ability to create new travel demand in the third most populous nation in Southeast Asia. “Across Asia we are seeing the positive impacts of introducing a new generation of customers to air travel, including Vietnam where the penetration of low cost carriers is still relatively low,” said Mr Buchanan. “The strength of our low cost model and the tremendous potential for growth provide a unique opportunity for Jetstar in Vietnam. Our partnership with Vietnam Airlines will help develop this.” Through the new partnership, Jetstar Pacific will receive an initial capital injection of AUD$25 million, including $7.5 million from the Qantas Group. This will be directed towards fleet renewal, with the carrier’s current Boeing 737s replaced with new A320s from mid-2012. The shareholders support Jetstar Pacific’s fleet to grow to 15 A320s within the next few years. Jetstar Pacific’s existing CEO and Chairman were representatives of former shareholder, SCIC. The Jetstar Group and Vietnam Airlines expect to announce a new CEO and Chairman in coming weeks. Mr Buchanan said Vietnam remained key to the Jetstar Group’s expansion plans across Asia Pacific, where it is the region’s fastest growing low fares carrier as well as the largest by revenue. “Jetstar continues to leverage the exceptional economic growth across Asia through strategic expansion of our network and fleet,” he added. According to International Air Transport Association (IATA), Vietnam will become the world’s second fastest growing aviation market for domestic passengers by 2014.
Jetstar today denounced claims that Vietnam based Jetstar Pacific was to be absorbed by the country’s flag carrier Vietnam Airlines, it seems that some media outlets were reporting that the airline would be wholly taken over by Vietnam Airlines. Earlier in the year we reported (in the following article Joint Qantas Vietnam Airlines Venture in Negotiations) that Vietnam Airlines and Qantas was in negotiations for possible transfer of the majority 73% stake which Vietnamese State Capital Investment Corporation (SCIC) has in Jetstar Pacific to Vietnam Airlines effectively making Qantas (a oneworld alliance member) and Vietnam Airlines (a SkyTeam alliance member) unlikely partners Jetstar’s CEO Bruce Buchanan said “Vietnam Airlines would be welcomed as a partner in Jetstar Pacific and it remained committed to the Vietnamese market as part of its broader pan-Asian strategy.” If anything today’s announcement by Jetstar confirm that a possible Qantas Group Vietnam Airlines partnership in Jetstar Pacific is highly likely and very imminent.
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,” 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.” 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. […]
Special launch fares just $2USD# one wayEvery Day one way fares from $12USD# one way Jetstar Pacific, Vietnam’s low fares airline, will expand into international markets for the first time under the Jetstar brand offering daily direct services from Ho Chi Minh City to Bangkok* (Thailand) and Siem Reap* (Cambodia). Commencing first services between Ho Chi Minh City -Bangkok* from 31 October 2008 and between Ho Chi Minh City – Siem Reap* from 3 November 2008, these services will initially be operated with a fleet of Boeing 737s before transitioning to a future fleet of new Airbus A320s. Jetstar Pacific has today launched its future daily Ho Chi Minh City – Bangkok* and Ho Chi Minh City – Siem Reap* services with special fares now available until 5pm today, September 10, 2008 from $2USD# (plus surcharges, fees and taxes) at Jetstar.com and Jetstar Pacific ticketing offices nationwide. (Terms and conditions apply. JetSaver Light fares) These special launch fares are featured with the airline’s JetSaver Light fare product, which offer customers with the choice to travel for a lower fare with carry on baggage only – to a maximum 7kg. Jetstar Pacific’s JetSaver fares on its new international routes allow customers to book with a 20 kilogram baggage allowance for 20 USD more per sector flown. Jetstar Pacific’s every day fares on the Ho Chi Minh City – Bangkok* route will start from $12USD# one way and from $40USD# one way between Ho Chi Minh City – Siem Reap*. Fares are JetSaver Light, exclusive of surcharges, fees and taxes. Every day fares also available through the airline’s Customer Service Centres at 9.550550 in Ha Noi and Ho Chi Minh City, 3.583583 in Da Nang. Jetstar Pacific CEO Mr Luong Hoai Nam said the airline’s entry into intra Asian markets of Bangkok and Siem Reap was an exciting development, supporting further expansion of the Jetstar brand across Asia. “Jetstar Pacific is continuing to positively change and expand air travel in Vietnam and now will bring a fresh approach to flying within Asia,” Mr Luong Hoai Nam said. “Now making it more affordable for more people to fly within Vietnam, our airline is bringing greater and easier access to exciting international destinations to and from Vietnam. “Siem Reap and Bangkok are major tourism markets, with existing and projected strong future growth in passenger volumes between these destinations and Vietnam. Both cities represent the logical first stage in Jetstar Pacific’s international growth plans, supported by our future fleet of A320s and the support of its shareholders including the Qantas Group. “We also expect to take a price leadership position in these international markets from Vietnam to provide even greater choice for travellers. Jetstar is committed to offering the lowest fares on the international markets we fly.” Customers on Jetstar Pacific’s future international services can also choose to offset their carbon emissions by voluntarily donating to the Jetstar Pacific Carbon Offset Programme, managed by the Vietnam Environmental Protection Fund. On these international […]