Malaysia’s AirAsia and Australia's Jetstar recent alliance to pool resources and expertise, procure new aircraft and revenue-sharing deals could lead to cost savings of about S$255.26 million annually. Jetstar CEO Bruce Buchanan revealed this at the recent Low Cost Airlines World Asia Pacific 2010 congress held in Singapore in January 2010 "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.
It will initially take 16 months from the signing of the agreement to see these savings but that figure is achievable every year thereon," Buchanan said. After a year of talks, the parties forged the 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 LCC specifications.
Announcement. Qantas Airways Ltd CEO Alan Joyce, said the parties "have the purchasing power to influence aircraft makers" to design the next genera ton of narrow body aircraft for the LCC industry. Joint procurement of airplanes will help the parties save and will modify the current aircraft deliveries.
" Qantas owns Jetstar group which has operations in Australia and joint ventures in 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 said the alliance would have no impact on maintenance of the Qantas/Jetstar group aircrafts. He stressed that it was a non-equity