Jump to content
MalaysianWings - Malaysia's Premier Aviation Portal
Alan B.

AirAsia and Jetstar Form a Joint Venture

Recommended Posts

This sounds interesting! Taken from The Star Online

 

 

Airlines’ bosses mulling over idea

 

PETALING JAYA: Something may be in the air between Qantas Airways Ltd and AirAsia Bhd. If things work out, a merger between AirAsia and the Australian carrier’s units Jetstar and JetstarAsia may be in the offing.

 

The talks are still in preliminary stages and it is learnt that AirAsia’s boss Datuk Seri Tony Fernandes and Qantas new chief executive officer Alan Joyce have been mulling over it. They last talked on the issue last week, a source said.

 

This comes at a time when Malaysia Airlines (MAS) is also in talks with Qantas for a possible alliance, but any alliance between Qantas and MAS will be between the network airlines.

 

p1-airlinechti.JPG Last week Qantas and British Airways announced the calling off of plans to merge into a mega carrier after failing to agree on key terms. The merger could have created an A$8bil plus carrier by market value with a fleet of about 500 planes.

 

The end of talks with BA opens new doors for other players such as MAS and AirAsia to search for synergies with Qantas. Now the brewing merger involves the low-cost carriers – AirAsia, Melbourne-based Jetstar and Singapore-based JetstarAsia.

 

Fernandes, when contacted yesterday, told StarBiz that “we are always talking and looking at ways to strengthen AirAsia into a global brand. If there are opportunities of equals which will enhance the brand, then it is something worth considering.’’ He declined to comment further.

 

Qantas’ Joyce was not immediately available for comment.

 

p1-tony.JPG Datuk Seri Tony Fernandes But a Qantas spokesman, in an e-mail response to a query from StarBiz, said: “We talk to airlines all the time about possible partnerships, relationships and cooperative agreements.’’

 

Jetstar’s Australian operation is wholly owned by Qantas but is managed separately and operates independently. Jetstar’s intra-Asian operation – JetstarAsia – is a Singapore-based partnership between Qantas (49%), local businessmen Tony Chew (22%) and FF Wong (10%), and Temasek Holdings (19%). JetstarAsia officials declined to comment when contacted yesterday.

 

In an economic downturn when passenger traffic is on a decline, airlines look to cooperate by forming code shares, alliances, strategic partnerships and even mergers to sustain operations. If a merger shapes up, it could possibly involve a share swap, a source said.

 

“A possible merger of Jetstar, JetstarAsia and AirAsia would mean that the operations of the airlines will be merged to create a stronger airline which could potentially be known as AirAsia/Jetstar with a larger network, a bigger aircraft fleet and wider access to many more markets.

 

“There are synergies by combining AirAsia and Jetstar. With a merger, passengers from Asia will have wider choices to fly to Asia, Australia, New Zealand, India, China and even Honolulu (via Jetstar),’’ he said.

 

The Kangaroo route (from any Australian point to KL and on to Europe) is a possible route that these airlines will capitalise on. Jetstar stopped flying the Sydney-KL route in September due to the economic slowdown.

 

Qantas and MAS talks were still progressing, another source added. He said the alliance would be modelled alongside the KLM/Air France structure. That model allows MAS to retain its identity.

 

MAS first began talking to Qantas a year ago.

 

Yesterday Qantas also announced that it has reduced its international and domestic fuel surcharges for the third time in recent months because of falling oil prices.

 

The new surcharges apply to tickets bought on, or after, Dec 23. Qantas executive general manager John Borghetti said the group’s fuel bill this financial year would still be A$400 million higher than in 2007/08. The surcharge has been cut by A$20 to A$35 for shorter-haul Asian destinations such as Bali.

 

The fuel surcharge for a one-way ticket from Australia to the United Kingdom and Europe has been cut by A$30 to A$160.

 

Qantas joins the league of airlines that are reducing fuel surcharges since crude oil prices have fallen over 70% from its July height of US$147 a barrel.

Edited by Alan B.

Share this post


Link to post
Share on other sites

On the same day the "alleged" merger was announced - a refute was issued by both parties......

 

 

http://www.news.com.au/heraldsun/story/0,2...482-664,00.html

QANTAS has denied its budget subsidiary Jetstar is in merger talks with low-cost carrier AirAsia.

"We are not in any formal merger talks with anyone at present," a Qantas spokesperson said today.

The spokesperson did say Qantas regularly spoke with other airlines about possible partnerships or agreements.

A report in Malaysia's The Star newspaper, citing an unnamed source, said Jetstar and AirAsia were in merger talks, possibly involving a share swap, to cope with the slowing worldwide demand for air travel.

 

 

 

http://business.smh.com.au/business/airasi...81223-749z.html

AirAsia shoots down Jetstar mergerMatt O'Sullivan

MALAYSIAN low-cost carrier AirAsia has dismissed speculation it is in preliminary talks for a possible merger with Qantas's budget offshoot, Jetstar.

Less than a week after Qantas broke off merger negotiations with British Airways, the Australian carrier has again become the centre of speculation after Malaysia's The Star reported that the airline had been in talks with AirAsia.

The newspaper said AirAsia's boss, Tony Fernandes, and his counterpart at Qantas, Alan Joyce, had preliminary talks about a merger last week.

But Azran Osman-Rani, the boss of AirAsia's long-haul subsidiary, yesterday scotched the report and said that the airline was not in talks with the Australian carrier.

"I think it's completely pie in the sky," he said yesterday. "It's the first time I have heard about it. We are just busy on our own plans … growing [the business]."

Jetstar's chief executive, Bruce Buchanan, also played down the speculation. "The key message is that we always talk to a lot of airlines but I wouldn't read too much into it. My primary focus is rolling out the Jetstar brand in Asia," he said.

Qantas has said it is keeping the door open to links with other carriers, particularly in Asia, although Mr Joyce said two weeks ago that the airline was "not talking to anybody else" at present.

After failing to agree with BA about the share ownership of the merged entity, Qantas is seen as more interested in courting an Asian carrier because of the region's better longer-term growth prospects.

Macquarie Equities believes a tie-up between Qantas and Malaysia Airlines is more likely, despite Singapore Airlines or Cathay Pacific viewed as being better suited for the Australian carrier. Competition concerns would be the major barrier to the latter two merging with Qantas.

"A strategic tie-up with Malaysian Airlines looks the most likely to succeed, given the interest shown by Malaysian management in seeking out a strategic partner and an admission from the Malaysian Government that it would be open to foreign tie-ups," the broker said.

Malaysia Airlines has named Qantas as a possible partner in recent weeks, despite sources at the Australian carrier playing down suggestions of a tie-up. They began merger talks earlier this year but these broke down over the likely ratio of shareholdings in any merged venture.

Qantas is also said to have long harboured a desire to merge with Cathay Pacific. The Hong Kong carrier has a large international hub and extensive freight operations, and also has strong links into the fast-growing Chinese aviation market through its subsidiary Dragonair.

Macquarie Equities emphasised regulations in Asia made mergers harder in the short term, although liberalisation of previously protected routes, such as Kuala Lumpur to Singapore, was a "step in the right direction".

 

 

 

 

Share this post


Link to post
Share on other sites

seems like airasia is out to find wifes.....last was SQ....now jetStar....hmmm......seing the global economy crisis, any megers are expected..... :sorry:

Share this post


Link to post
Share on other sites

AirAsia And Jetstar In Merger Talks

 

December 23, 2008

Malaysian low-cost airline AirAsia is in talks to merge with the budget carrier of Australia's Qantas Airways, a Malaysian newspaper reported on Tuesday citing an unnamed source.

 

The possible merger between AirAsia and Jetstar could involve a share swap and would help the carriers cope with the impact of slowing demand worldwide as the global economy weakens, The Star newspaper said.

 

Merger talks are at a preliminary stage, the report said.

 

Asked to comment, AirAsia chief executive Tony Fernandes told the newspaper: "We are always talking and looking at ways to strengthen AirAsia into a global brand.

 

A Qantas spokesman told the paper: "We talk to airlines all the time about possible partnerships, relationships and cooperative agreements."

 

Qantas and British Airways had earlier this month called off talks for a USD$6.4 billion merger.

 

Fernandes has said that AirAsia may be taken private.

 

(Reuters)

 

Share this post


Link to post
Share on other sites
AirAsia And Jetstar In Merger Talks

 

Fernandes has said that AirAsia may be taken private.

 

(Reuters)

 

If TF can secure enough finance (not in the next 6 months), it is more likely that he will take the airline private.

 

:drinks:

 

Share this post


Link to post
Share on other sites

it seems like he is having problems getting finance... not going to TF's plan at the moment!

Edited by Izanee

Share this post


Link to post
Share on other sites

Steve Creedy, Aviation writer

 

JETSTAR and AirAsia are about to announce an operational joint venture that could save hundreds of millions of dollars by enabling them to jointly buy aircraft, parts and other goods.

 

The two airlines would still compete for passengers and the deal does not involve equity.

 

It aims to cut costs through economies of scale.

 

A Qantas Group spokesman confirmed yesterday that the two airlines were talking but declined to comment further.

 

It is understood the region's two biggest low-cost carriers have been talking for some time and are working out final details of the deal.

 

Areas expected to be included in the agreement are procurement and ground handling, with costs savings in the order of 5-10 per cent.

 

Kuala Lumpur-based AirAsia is the Asia-Pacific region's biggest low-cost carrier.

 

It is headed by flamboyant entrepreneur and former musician Tony Fernandes.

 

At the end of last month it had a fleet of 64 180-seat Airbus A320 aircraft and 18 Boeing 737s.

 

It operates more than 400 flights daily to domestic and international destinations and has offshoots in Thailand and Indonesia as well as a stake in long-haul carrier AirAsiaX, which serves Australia.

 

Airlines flying under the Jetstar brand operate 46 A320 and and A321 aircraft.

 

Combining procurement for the two fleets will give the carriers more clout to cut deals with suppliers.

 

The two airlines also plan to share ground handlers in ports where one partner faces higher costs because it does not have enough flights.

 

They are considering pooling parts, giving them wider coverage at lower cost.

 

The deal is understood to minimise the need for regulatory approval but that might be unavoidable in some areas.

 

Engineering work will still be done separately and the agreement will not include heavily regulated areas such as training and standards.

 

In the longer term, the airlines hope to join forces on aircraft purchases. They are hoping the size of their combined fleet will give them enough sway to influence the design of the next generation of narrow-body jets when they are offered.

 

The Australian low-cost carrier has been expanding in Southeast Asia as part of a pan-Asian strategy that includes stakes in Jetstar-branded airlines in Singapore and Vietnam.

 

Jetstar chief executive Bruce Buchanan reaffirmed the airline's Asia focus last week as Singapore-based Jetstar Asia began services to mainland China.

 

The move is expected to be a blow to Singapore-based Tiger Aviation.

 

Source: http://www.theaustralian.com.au/business/budget-carriers-unite-to-cut-costs/story-e6frg8zx-1225811541654

Share this post


Link to post
Share on other sites

by next year, D7's ground handling will be done by their own men already, no more relying on KLAS for the ground support. only the parking bays will be theirs.

Share this post


Link to post
Share on other sites

AirAsia-Jetstar tie-up is on

 

PETALING JAYA: The proposed partnership between AirAsia Bhd and Jetstar is nearing fruition after a year of talks and the deal will be announced in the first week of January.

 

A media conference has been scheduled for Jan 6 in Sydney where both parties and Qantas 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 group chief executive officer Datuk Seri Tony Fernandes and Jetstar CEO Bruce Buchanan will be at hand to present the details. Jetstar’s parent, Qantas, will be represented by its CEO Alan Joyce.

 

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.

 

“Cost efficiencies is only one of the many things this new partnership will bring about,’’ said a source.

 

StarBiz was the first to report on a proposed partnership on Dec 23 last year. Then, both parties including Qantas had started preliminary talks for a proposed merger. The parties had met several times over the year and even conducted some audit work.

 

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.

 

AirAsia boss Fernandes, when contacted yesterday, did not want to shed any light on the partnership. Will this deal involve any codeshare arrangements between the two airlines?

 

Codeshare is a prominent feature with full service carriers and if low cost carriers can see some benefit from sharing of flights, then they may be setting new grounds.

 

An analyst, however, has a contrarian view. He said: “It goes against the (low cost) airlines’ rule of keeping it simple in the no-frills business to codeshare but a lot depends on the intention of the airlines.’’

 

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.

 

Source: http://biz.thestar.com.my/news/story.asp?file=/2009/12/31/business/5389706&sec=business

Share this post


Link to post
Share on other sites

From The Australian:

 

Jetstar-AirAsia alliance only "first step": Bruce Buchanan

UPDATE: Bill Lindsay From: Dow Jones Newswires January 06, 2010 11:33AM

 

JETSTAR, the cut-price unit of Qantas Airways, and Malaysian discount carrier AirAsia today said they have formed an alliance aimed at cutting costs, pooling their expertise and reducing air fares.

 

The non-equity alliance between two of the Asia-Pacific's largest discount carriers will also see them work together on proposed specifications and joint procurement for the next generation of narrow-body aircraft, the two groups said in a joint statement.

 

The airlines have also agreed to co-operate on passenger and ground handling in Australian and Asian airports they both serve, pooling their inventories of aircraft components and spare parts, and joint procurement of engineering and maintenance supplies and services.

 

The deal is an "important first step", Jetstar chief executive Bruce Buchanan said at a media conference, and could result in costs savings "in the hundreds of millions of dollars".

 

Qantas chief executive Alan Joyce said in a joint statement that the airline industry in the Asian region held up relatively well in 2009.

 

"The aviation market in Asia is a growth market and has proven resilient over the past 12 months, despite the tough operating environment, with significant growth in passenger numbers forecast in the region," Mr Joyce said.

 

"This partnership will ensure that both airlines can capitalise on these growth opportunities."

 

AirAsia chief executive Tony Fernandes said a common aircraft type-specification for the next generation narrow-body planes would be pursued by both airlines because of the many efficiencies it would bring.

 

"With joint purchasing power it means that we can potentially work with airline manufacturers on the right configuration and design of an aircraft specifically for AirAsia and that best suits our operational needs for the future," Mr Fernandes said.

 

Qantas shares rose 4 cents (1.4 per cent) at $3 on news of the alliance.

 

IG Markets analyst Ben Potter said the tie-up is a positive development for both carriers and shows both management teams are "thinking outside the box" to ensure they remain leaders in the region.

 

"In an extremely competitive environment where airlines have been under constant pressures from a number of different forces, this world first alliance is very positive indeed," Mr Potter said in a client note.

 

"The Asia-Pacific region is one of the biggest growth markets in aviation, so any ways to further reduce costs and offer more competitive fares will benefit both shareholders and customers," he said.

 

Share this post


Link to post
Share on other sites

Interesting review by Centre of Aviation

http://www.centreforaviation.com/news/2010/01/07/airasia-and-jetstar-join-forces-a-potential-killer-combination-in-asia/page1

 

Exerpts:

 

Malaysia – Qantas Group’s gateway to Asia?

Qantas under Geoff Dixon’s leadership was keen on a Malaysian linkage for quite some time. Apart from cultivating a relationship with Tony Fernandes, Dixon was responsible for getting almost to the finish line with a proposed “merger” with Malaysia’s flag carrier, Malaysia Airlines, in late 2008, just as Alan Joyce was taking over the reins at Qantas. This was to involve commercial cooperation and profit sharing and clearly presaged a wider joint relationship. It was to have become a three-way merger, with Qantas also effectively taking over British Airways. But all this faltered as MAS and the government lost momentum, along with the global economy.

 

So there is ample logic in expanding the Australia-Malaysia aviation axis. As long as Qantas/Jetstar has no direct service between Sydney and Kuala Lumpur, there is a void from the Qantas Group side. The only non-stop operator on the route is MAS, with AirAsia X prevented from flying the route by its own government, in order to protect the valuable market for the Malaysian flag carrier.

 

Jetstar did briefly operate there, but pulled out due to a combination of stiff competition from AirAsia X (out of the Gold Coast) and the need to reallocate scarce A330 aircraft to the Japanese market, in order to preserve Qantas’ slots at Narita.

 

Malaysia Airlines out in the cold; is there another shoe to drop?

That raises an intriguing scenario. The big potential loser in this deal is Malaysia Airlines. After a remarkable turnaround in 2007, MAS is now again struggling seriously, as premium demand slips and as AirAsia, with its much lower cost base, becomes more powerful. (Another “victim”, Tiger Airways, was specifically targeted with the timing of this announcement, simultaneous with Tiger’s release of its IPO prospectus).

 

AirAsia’s tie up with the powerful Qantas Group will do nothing to reduce the flag carrier’s problems. It may well even bring things to a head. MAS is going to need to take some difficult decisions. With market demand promising to remain slow in 2010, the carrier’s recent deterioration into loss making and its relatively poor performance alongside AirAsia (see LINK -Malaysia Airlines loss in 3Q2009 USD88.6 million. Full service airline shrinks while AirAsia expands), the majority government owned carrier cannot afford to stand still.

 

Qantas’ previous close link with MAS CEO Idris Jala has gone, following the dynamic executive’s promotion into a key government role, but the links are still there. And the potential is compelling, especially for the Malaysian government, as its investment appears to be in jeopardy once again. A strengthened AirAsia in a relationship with Qantas Group will heighten that awareness.

Share this post


Link to post
Share on other sites

One thing with Tony, he is the 'happy-go-lucky' kind a guy, everybody loves to discuss and deal almost about everything with him...this kind of guy will rule the aviation world one day. You can judge by looking at the photos took from the MoU...

 

p/s: I think, Richard Branson also is kind of a guy like that...

Share this post


Link to post
Share on other sites

Since MoT is still refusing D7 permission to ply KUL/SYD, JQ should wet lease A333 from D7 to start serving KUL/SYD and code share with D7.

 

 

:drinks:

Edited by KK Lee

Share this post


Link to post
Share on other sites

One thing with Tony, he is the 'happy-go-lucky' kind a guy, everybody loves to discuss and deal almost about everything with him...this kind of guy will rule the aviation world one day. You can judge by looking at the photos took from the MoU...

 

p/s: I think, Richard Branson also is kind of a guy like that...

Yes they like to give everything a go. If you don't try, you won't know if you can succeed!

Share this post


Link to post
Share on other sites

He'll be like the Juan Trippe of the LCC world :rolleyes:

Richard Branson is an adventure man not a happy go lucky.

 

One thing with Tony, he is the 'happy-go-lucky' kind a guy, everybody loves to discuss and deal almost about everything with him...this kind of guy will rule the aviation world one day. You can judge by looking at the photos took from the MoU...

 

p/s: I think, Richard Branson also is kind of a guy like that...

Share this post


Link to post
Share on other sites

Following Azri's posting, here is another news article that clearly mentioned MH as the sore stumbling block for everyone.

 

AirAsia X may ply KL-Sydney route by July

By B.K. SIDHU

 

SYDNEY: AirAsia X expects to ply the controversial Kuala Lumpur-Sydney route in June or July even though it has yet to receive the nod from the authorities to do so. “That is what we plan and we hope to be able to do so by then,’’ said AirAsia group chief executive officer Datuk Seri Tony Fernandes yesterday.

 

AirAsia X had applied to ply the Sydney and Seoul routes from Kuala Lumpur last year but could not get the required approvals due to several factors and was then told to pay its dues to Malaysia Airports Holdings Bhd (MAHB) instead. It has since paid off its dues to MAHB and now wants to expand its base into Australia, with Sydney seen as a city where it can offer travellers an alternative carrier.

 

“AirAsia X is going through exactly what AirAsia went through with the incumbent airline and unfortunately, the incumbent has a huge say on where and how we fly. But let’s not forget that wherever we go, we grow the market significantly,’’ Fernandes said. He added that “we have not got the rights yet to fly to Sydney and are working on it.”

 

Even Jetstar is keen to reinstate its flights from Sydney to Kuala Lumpur which it pulled back over a year ago. Jetstar CEO Bruce Buchanan said the airline was looking at all options and could reinstate its flights this year as it was getting more new aircraft. He also does not discount route-sharing with AirAsia.

 

But “with or without Jetstar, we want to fly to Sydney from Kuala Lumpur,’’ Fernandes said.

 

Buchanan said Jetstar pulled out of Kuala Lumpur so that it could redeploy its aircraft for its flight into Tokyo. “We deployed the aircraft as Tokyo was an opportunity that we could not miss then. But now (the Kuala Lumpur-Sydney) route is an area we can discuss (with AirAsia) and see how we can work on that. This year could be the year, but we have to prioritise where the aircraft is needed most. There is a whole load of opportunities (everywhere),’’ he said.

 

The alliance that AirAsia and Jetstar forged yesterday would also possibly include rotational flights by both parties on the Kuala Lumpur-Singapore route, Buchanan said.

Share this post


Link to post
Share on other sites

I think in not to distant future, there will be a repositioning of Jetstar in KLIA. I would imagine Jetstar Asia/Jetstar Airways moving to LCCT as they are being handled by AirAsia ground crews.

 

This will also enable some sort of codeshare happens between KUL-SYD and KUL-SIN.

 

In terms of benefit, I think for Australia wise, Jetstar can give promotion on behalf of AirAsia, and also from KUL base. I think there is good synergy between these two airlines.

Share this post


Link to post
Share on other sites

Become the worlds first low cost alliance !

 

Here are the details regarding this exciting news .

 

There will be more destinations, more choices, more convinient with one focus to be the worlds lowest low cost airlines !

 

Good job! Mr Tony ~

 

Here the link ,

http://airlineworld.wordpress.com/2010/01/08/air-asia-and-jetstar-form-new-alliance/

Edited by Nabiel Haniff

Share this post


Link to post
Share on other sites

×
×
  • Create New...