Thursday 07 January

Jetstar and AirAsia form innovative partnering deal

Travel Today reported yesterday that Jetstar and AirAsia will jointly purchase aircraft and partner on other operational initiatives as part of a wide-ranging alliance announced today.

The non-equity partnership, which is expected to net hundreds of millions in savings, will see Jetstar and AirAsia work together on aircraft purchasing, ground handling, fleet specification and the pooling of aircraft components.

Jetstar chief executive Bruce Buchanan said the deal gives both carriers the scale to strengthen their footholds in Asia. One of the major areas of saving will be fleet specification. Buchanan said the collective buying power of both carriers will give them more sway with manufacturers as they develop new generation, narrow body aircraft.

“It’s about getting the next generation of aircraft that is best suited for this region,” Buchanan said. “We see natural synergies as we are very similar business models.”

AirAsia Group chief executive Tony Fernandes said aircraft had traditionally been designed for full-service carriers. “With joint purchasing power it means 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,” Fernandes said.

Qantas Group chief executive Alan Joyce said the deal “reinforces our position in Asia”. He added he does not expect opposition from regulatory authorities, and claimed there will be no impact on jobs.

This alliance between Jetstar and AirAsia could extend to hotel inventory, Jetstar boss Bruce Buchanan has said. While the deal announced yesterday covers only operational aspects, Buchanan admitted commercial synergies had been identified. “Things like the joint procurement of hotel inventory. We both fly to a range of leisure destinations, we could  secure really good holiday deals,” Buchanan said. "Codeshare and interline deals are also an option", he said.

AirAsia chief executive Tony Fernandes shed light on some of the other cost-saving initiatives.  He said discussions had taken place over the joint purchasing of fuel, and the use of AirAsia’s training facility.

Editors comments: Well, well, well, I know its Jetstar but hey that's Qantas at the end of the line, so well done you for thinking outside the box or should I say boxes.  With this level of potential savings, they can start looking at opening up some of the routes that are currently reduced or non-operational.  Or am I being naive again ?