Jetstar goes to Vietnam

Qantas Group airline Jetstar, and Pacific Airlines (Pacific Airlines Joint Stock Aviation Company) have entered into a major strategic and commercial partnership to support the Vietnamese carrier’s plan for future growth within both Vietnam and intra-Asia markets under the Jetstar brand.

On 23 May 2008, Vietnam’s second largest carrier Pacific Airlines, will complete its transformation to become Vietnam’s first low-cost carrier (LCC) and will be renamed ‘Jetstar Pacific’ (Jetstar Pacific Airlines Joint Stock Aviation Company).

The State Capital Investment Corporation (SCIC) and shareholders of Pacific Airlines have approved the establishment of a Business Service Agreement (BSA) between Jetstar and Pacific Airlines under an agreed business plan, supported by a management team that includes Jetstar and Qantas executives.

The wide-reaching agreement for Jetstar Pacific includes the renaming of the airline, operating future flights within Vietnam and across Asia under the Jetstar brand, providing every day low fares and a standardised customer experience.

The BSA will support new commercial and distribution arrangements for Jetstar Pacific, the development of a Vietnamese website at Jetstar.com as a core distribution and revenue channel in Vietnam, and the introduction of a future fleet of up to 30 Airbus A320 aircraft by 2014 to support its expansion.

The first A320 is proposed to enter Jetstar Pacific’s operations in August 2008, initially growing services within Vietnam, before undertaking future international expansion from late this year into markets likely to include Thailand, Singapore, Malaysia and Cambodia.

The series of announcements were made jointly in Ho Chi Minh City today by Qantas Group Chief Executive Officer Geoff Dixon, Jetstar Chief Executive Officer Alan Joyce and Pacific Airlines Chief Executive Officer Luong Hoai Nam, accompanied by the Australian Ambassador to Vietnam, His Excellency Mr Bill Tweddell.

The Qantas Group, which made an initial investment of 18 per cent in Pacific Airlines in July 2007, will increase its investment in the airline to a 30 per cent holding in 2010.

Qantas Group CEO Geoff Dixon said in joining Jetstar, the Vietnamese carrier would help form one of the largest and fastest growing airline brands in the region.

“Jetstar Pacific will be able to access and leverage the significant expertise and resources within the Qantas Group that will help enable its planned future growth,” Mr Dixon said.

“This includes the placement of Qantas and Jetstar executives in key management roles within Jetstar Pacific, and the supply of a range of aviation services.”

Jetstar CEO Alan Joyce said the establishment of this Agreement placed the Vietnamese carrier in a strong position to leverage the successful Jetstar brand and business model.

“We have repositioned the airline as Vietnam’s first low cost carrier to enable its future sustainable expansion within Vietnam and into many international markets,” Mr Joyce said.

Jetstar Pacific CEO Luong Hoai Nam said: “Our future success will be achieved through this innovative and unique partnership with Jetstar via a proven low cost airline business model and our ability to expand through the strong Jetstar brand.

“We will be following in the footsteps of Jetstar’s success by achieving the benefits of low fares leadership and strong and sustainable growth in other parts of the world.”

Jetstar Pacific today serves seven destinations within Vietnam operating almost 130 weekly return services with an existing fleet of four single class Boeing 737-400s.

Mr Luong Hoai Nam said its future growth plans would support at least an eight fold rise in weekly operations.

In its initial growth phase, additional services will be added from Ho Chi Minh City to Da Lat and Buon Me Thout and three new direct routes from Hanoi to Da Nang, Hue and Cam Rahn.

“Jetstar Pacific will also expand daily frequencies on its largest market between Ho Chi Minh City and Hanoi and has plans for future growth from Hanoi to other Vietnamese cities including Da Lat, Buon Me Thout and Can Tho,” Mr Luong Hoai Nam said.

Jetstar branded operations into Vietnam currently include a three times weekly Sydney – Ho Chi Minh City service operated by an A330 and Singapore – Ho Chi Minh City A320 services operating 16 times weekly.

Mr Joyce said with the launch of Jetstar Pacific, Jetstar airline brands will fly to over 40 destinations across Asia, the Asia Pacific, Australia and New Zealand.

Jetstar CEO Alan Joyce and Jetstar CFO David Hall currently represent the Qantas Group on Jetstar Pacific’s six-member Board of Directors.

Management roles within Jetstar Pacific currently filled by Qantas and Jetstar executives include chief operating officer, chief financial officer, chief pilot and heads of ground operations, safety and security.

Jetstar Pacific has also unveiled cabin crew uniforms and a new aircraft livery for its future fleet of A320s reflecting Jetstar’s distinctive brand colours of orange and black.

 

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