AirAsia and Australia’s Jetstar to pool resources and expertise, procure new aircraft and revenue-sharing deals which could lead to cost savings of between A$255milion annually.
It will initially take 16 months from the signing of the agreement to see these savings but that figure is achievable every year there on. The immediate cost savings will be in fuel purchases, maintenance, sharing of aircraft engine spare parts and ground handling in the Asian markets both carriers operate.
After a year of talks, the parties forged an first such alliance in the low-cost carrier (LCC) industry to reduce cost and pool resources. A key component of the agreement is its ability to influence aircraft makers to manufacture robust planes that suit the LCC specifications
Qantas Airways Ltd CEO Alan Joyce, who was at the press conference, said the parties “have the purchasing power to influence aircraft makers’’ to design the next generation of narrow body aircraft for the LCC industry.
Joint procurement of airplanes will help the parties save and Fernandes said AirAsia “will modify the current aircraft deliveries.’’
Qantas owns Jetstar group which has operations in Australia and joint ventures in Singapore (Jetstar Asia) and Vietnam. AirAsia has operations in Thailand and Indonesia and owns a stake in AirAsia X.
“This is a historic alliance and the world’s first and we hope to lead the way. This is the foundation to a beginning of a relationship that will lead to joint ventures and huge cost savings. This will reinforce Qantas group’s position in Asia as we continue to focus on Asia,’’ Joyce added.
He side-stepped worries of job cuts and said the alliance would have no impact on maintenance of the Qantas/Jetstar group aircraft. He stressed that it was a non-equity