AirAsia low cost airline/Vietnam

AirAsia, a major low-cost airline in Asia, said it has purchased a 30 percent stake in VietJet Aviation of Vietnam to establish a budget carrier based in the country.

AirAsia aircraft at Noi Bai International Airport in Hanoi (Photo: VNE)

AirAsia’s Vietnam representative office sent out a statement Thursday saying that the new carrier will be called VietJet AirAsia.

AirAsia said in a statement late Wednesday from Kuala Lumpur that the Ministry of Transportation of Vietnam approved the share acquisition on Tuesday, February 9. It did not reveal how much it paid for the acquisition.

The new carrier will be operating both domestic and international flights, AirAsia said. It is currently finalizing details regarding routes, frequencies and launch of flights.

The formation of the new airline makes Vietnam AirAsia’s fourth country base, following Malaysia, Thailand and Indonesia.

AirAsia said it joined the venture to expand its reach in Vietnam and open the country as another gateway in the ASEAN region.

It added the joint venture “will be tapping be tapping the expertise of both AirAsia and VietJet Air for the successful operation and marketing of low-cost flights.”

Subject to regulatory approval, the venture is expected to start operations either in April or June this year.

VietJet Air was licensed to operate in December 2007 as a partnership of SOVICO Holdings (an established corporation with interests in banking and finance, real estate, plantation and power plants), T&C Group and Ho Chi Minh City Housing Development Bank, or HDBank.

However, VietJet Air has not launched its flights due to fuel price fluctuations and the global economic downturn that began late 2008.

Vietnam has so far approved three private airlines namely VietJet Air, Indochina Airlines and Mekong Aviation. Indochina Airlines stopped flights in November last year due to losses. Mekong Aviation had plans to start operations this year on domestic routes but no developments have been seen so far.

Meanwhile, there are no signs of when the national carrier – Vietnam Airlines – would launch low-cost services.

VietNamNet/SGGP

Jetstar, AirAsia firm low-cost alliance

In a world first for low-cost airlines, Jetstar and AirAsia announced Wednesday they would form a new alliance that would reduce costs and pool expertise, ultimately resulting in cheaper fares for both.

The carriers said in a statement they would focus on cost reduction and potential savings.

The statement said the key to the agreement was a proposed joint specification for the next generation of narrow-bodied aircraft that would best meet the needs of the low fare customer of the future.

Both airline groups will also investigate opportunities for the joint procurement of aircraft.

Alan Joyce, chief executive officer of Australia’s Qantas Airways, Jetstar’s parent, said the historic non-equity alliance would give the two airlines a natural advantage in one of the world’s most competitive aviation markets.

“Jetstar and AirAsia offer unmatched reach in the Asia Pacific region… and this new alliance will enable them to maximize that scale,� he said.

The Asian aviation market is a growth market which has proven resilient over the past 12 months despite the tough operating environment, with significant growth in passenger numbers forecast in the region, thestatement said.

“Year on year, Jetstar is reducing its controllable costs by up to 5 per cent annually. This agreement will enable a further change in our cost position and ensure sustainable low fares,� Jetstar CEO Bruce Buchanan said.

He said both carriers want to work with manufacturers on the next generation aircraft to ensure it best meets their business requirements.

AirAsia Group CEO Datuk Seri Tony Fernandes said the carrier strongly believed the strategic tie-up would help it maintain its position as the lowest-cost airline in the world despite rising costs associated with the fledgling global economic recovery.

These arrangements are, where required, subject to regulatory approval.

The two largest airlines in the Asia Pacific in revenue terms jointly earned revenues of nearly AUD$3 billion (US2.74 billion) in 2009 financial year, according to the statement.

Jetstar holds a 27 percent stake in Jetstar Pacific while the sovereign fund State Capital Investment Corporation owns 69.93 percent.

Reported by Minh Quang