Jetstar, AirAsia to form low-cost carrier alliance

QANTAS low cost carrier Jetstar Airways and Malaysian budget airline AirAsia have announced an alliance to cut costs, pool expertise and provide cheaper fares in the Asia Pacific region.

"The announcement breaks the mould of traditional airline alliances and establishes a new model for achieving reduced costs and increased efficiency," said Qantas CEO Alan Joyce.

Said AirAsia CEO Tony Fernandes: "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."

The alliance "will focus on a range of major cost reduction opportunities and potential savings, to the benefit of customers throughout the region," said a joint statement that was released in the wake of the signing of the agreement in Sydney between Qantas Airways, Jetstar and the AirAsia Group.

The tie-up paves the way for both carriers to cooperate in certain areas, such as future fleet specification, whereby both carriers will investigate opportunities for the joint procurement of next generation, narrow body aircraft. A collective goal is to achieve cost reductions in terms of order volume and to influence design specification, in an effort to deliver more efficient, low cost operations.

The partners also plan to develop cooperative arrangements for the provision of air passenger and ground/ramp handling services in Australia and Asia at overlapping airports by leveraging scale.

Another key area includes "pooling" inventory arrangements for aircraft components and spare parts and joint procurement with a focus on engineering and maintenance supply and services. Jetstar will maintain its existing use of and commitment to Australian facilities in this context.
 

Source: SchedNet