AirAsia / Jetstar

— Australia's national airline Qantas Friday said its budget offshoot Jetstar was in talks with Malaysia's AirAsia about a possible joint venture aimed at reducing costs.
"Qantas confirms that its wholly-owned subsidiary Jetstar and AirAsia have entered discussions regarding a potential cost-saving joint venture," the company said in a statement to the market.
"However, these discussions are at a preliminary stage and no binding agreements have been reached."
A spokesman for Jetstar said the venture was aimed at savings on the ground, and the airlines would still compete for passengers.
"It could be along the lines of non-competing areas of aviation that could deliver significant cost savings," the spokesman told AFP.
"An example could be some ground handling opportunities, an example could be some procurement opportunities."
Despite coming just days after Australia announced it would relax some foreign ownership rules for Qantas, the venture would not affect either airline's ownership, he added.
"These discussions have been had in complete isolation to what's come out in recent days," the spokesman said.
"The crux of this is about cost and pursuit of economies of scale amongst the Asian region's two largest low-cost carrier groups."
Kuala Lumpur-based AirAsia is the Asia-Pacific region's largest budget carrier, operating more than 400 daily flights to 60 destinations.
Jetstar operates almost 2,000 weekly flights to more than 50 destinations in Australia and the Asia-Pacific.
Australia on Wednesday unveiled a blueprint for its aviation industry for the next two decades which eases some restrictions on foreign ownership of Qantas while leaving the 'Flying Kangaroo' majority Australian owned

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AirAsia and Jetstar Airways will announce a far-reaching joint venture Wednesday that will involve a host of backroom functions and joint purchasing, although it is unclear if codesharing will be included in the partnership. Sources in Malaysia confirmed the pending announcement to ATWOnline and said the cooperation between the region's two largest LCCs will be extensive and will help both carriers contain fares and benefit from economies of scale. The unveiling in Sydney will be the culmination of talks that started in late 2008. Discussions between the two airline groups date back to 2004. Qantas confirmed the talks before Christmas [Vous devez être inscrit et connecté pour voir ce lien]. AirAsia operates 129 routes to 65 destinations with 82 aircraft from hubs in Malaysia, Thailand and Indonesia. Jetstar has 49 A320s and A330s and operates 1,900 weekly flights to destinations in 15 countries. It announced a significant domestic expansion last month
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The new Jetstar-[Vous devez être inscrit et connecté pour voir ce lien] alliance could examine the formation of a new leasing company based around their older [Vous devez être inscrit et connecté pour voir ce lien] aircraft.
"This is an interesting option for us," says Tony Fernandes, CEO of AirAsia, who adds that the venture would have to overcome tax issues. Given that the companies operate a large fleet of A320s, it would enable them to provide easy access to spares and overcome other issues, he adds.
Between them the two carriers operate a total of 166 [Vous devez être inscrit et connecté pour voir ce lien] aircraft with 162 on order, according to Flightglobal's ACAS database. AirAsia operates 48 A320-200 aircraft with 105 on order, and Jetstar Australia operates 32 A320-200s with 57 on order. Singapore-based Jetstar Asia operates six A320-200s

The newly-formed Jetstar-[Vous devez être inscrit et connecté pour voir ce lien] alliance hopes to influence the future design of narrowbody aircraft to better fit the needs of low-cost operations in Asia.
"Aircraft are generally designed for full-service carriers, what we need is an aircraft designed for low-cost carriers in Asia," says AirAsia CEO Tony Fernandes.
He believes aircraft design can be enhanced to reflect the stresses on aircraft that are particular to low-cost operations, particularly regarding fuel savings and reliability issues. A solution, he adds, could be for manufacturers develop separate types of narrowbody aircraft for low cost carriers and full service carriers.
Reducing costs through better purchasing power and design influence over new narrowbody aircraft are the key features of Jetstar and AirAsia's new non-equity airline alliance, which the carriers announced today.
The alliance believes collective purchasing during the next round of narrowbody aircraft orders will deliver significant savings. "The AirAsia name carries a lot of clout," says Fernandes.
He also believes the alliance's purchasing power could be used beyond narrowbody aircraft. "There are no reasons why this can't be extended to includes widebodies as we both have [Vous devez être inscrit et connecté pour voir ce lien] A330s," he says.
Jetstar chief executive Bruce Buchanan says that the partners have identified "many hundreds of millions of dollars of cost saving opportunities", but admitted most of this would come from aircraft design and purchase initiatives.
Other savings will come from agreements to cooperate on the provision of passenger and ground handling in Australia and within Asia at overlapping airports, and will pool inventory for aircraft components and spare parts. They will jointly procure engineering and maintenance supplies and services, with Jetstar saying that it will maintain its existing use of and commitment to Australian facilities. The alliance is also looking at the joint purchase of fuel.
Finally, there will be reciprocal arrangements for passenger management. This will allow them to support passenger disruptions and recovery onto the other airline's service across both of their networks.

Low-cost carriers Jetstar and [Vous devez être inscrit et connecté pour voir ce lien] have formed a new alliance that will allow them to study the joint purchase of new aircraft, cooperate in ground and passenger handling services, and take on each other's passengers when there is a disruption.
The agreement will reduce costs and pool their expertise, and result in lower fares for customers throughout the Asia Pacific, say the carriers. This is the first time two major low-cost carriers are cooperating on such a large scale, they add.
Jetstar, a subsidiary of Australian flag carrier Qantas, and Malaysia-based AirAsia are the two largest low-cost carriers in the Asia Pacific. The deal will give them "a natural advantage in one of the world's most competitive aviation markets," say the carriers.
For future fleet specifications, the carriers will investigate opportunities for joint procurement of the next generation of narrow body aircraft. "A collective goal is to achieve cost reductions in terms of order volume and influencing design specification to deliver more efficient, low cost operations," they say.
They will also develop agreements to cooperate on the provision of passenger and ground handling in Australia and within Asia at overlapping airports, and will pool inventory for aircraft components and spare parts. They will jointly procure engineering and maintenance supplies and services, with Jetstar saying that it will maintain its existing use of and commitment to Australian facilities.
Finally, there will be reciprocal arrangements for passenger management. This will allow them to support passenger disruptions and recovery onto the other airline's service across both of their networks.
"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. This partnership will ensure that both airlines can capitalise on these growth opportunities," says Qantas CEO Alan Joyce.
AirAsia's CEO Tony Fernandes says that the agreement is another step in his carrier's strategy to "maintain its position as the lowest-cost airline in the world despite rising costs associated with the fledgling global economic recovery".
AirAsia is Asia's largest low-cost carrier with associates in Thailand and Indonesia. It also has a long-haul associate, [Vous devez être inscrit et connecté pour voir ce lien], which flies to Perth, Melbourne and the Gold Coast in Australia. Jetstar flies to regional and long haul destinations out of Australia, and has associate carriers in Singapore and Vietnam.