Monday, April 14, 2008

Qantas lands rosey Vietnam deal | Herald Sun

QANTAS could fly to a range of new destinations across Europe as a result of the strategic partnership announced yesterday with Vietnam state-owned carrier, Pacific Airlines.The Vietnamese airline, which is being rebadged as Jetstar Pacific and in which the Australian carrier has an 18 per cent stake, holds a rich list of air traffic rights to destinations where Qantas has restricted or limited access. A typical example is Charles de Gaulle Airport on the outskirts of Paris where Qantas passengers have to travel under a code share arrangement with Air France, because the Australian carrier's limited access to the French capital makes a Paris service unprofitable. But that could change as a result of the decision Qantas has made to take an 18 per cent stake in Jetstar Pacific, formerly Pacific Airlines, at a cost of $30 million. That stake will eventually grow to 30 per cent at a total cost to Qantas of $50 million plus the additional costs involved in seconding 19 executives to key posts with its new Vietnamese partner. Jetstar Pacific's chief executive Loung Hoai Nam told BusinessDaily yesterday that his airline was prepared to leverage long haul traffic rights to promote expansion. Under such an arrangement Jetstar passengers could fly to Ho Chi Minh City from Australia on a $400 fare and transfer there to codeshare flight that both Jetstar Australia and Jetstar Pacific might operate to Europe. Mr Nam said that Australian based Jetstar officials had already held talks with airport and civil aviation authorities in Ho Chi Minh City about using the city's airport as a hub for future Australian-European services. Jetstar, which hopes to obtain six long haul A330 jets soon as a stop gap measure because of delays in getting its new fleet of Boeing 787 Dreamliners, wants to begin $800 flights to Europe by late 2009. Mr Nam said yesterday that his airline held traffic rights to Paris, the United Kingdom, Germany, Italy and Spain. At yesterday's ceremony to announce the airline partnership, the Australian Ambassador to Vietnam, Bill Tweddell told how Vietnam was witnessing a new wave of investment from Australia. He said that 2007 saw approvals for licensed projects involving Australian investment totalling $US192 million. "This was more than a quarter of all committed Australian foreign development investment of previous years," said Mr Tweddell, adding that further impetus to trade links between both countries would come from an Asian-Australian-New Zeland free trade agreement due to come into force later this year.
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