Jet * Asia gonna do a tie-up??
Qantas's ambitions to establish a low-cost beachhead in Asia appear to be hanging in the balance after its Jetstar Asia joint venture confirmed it is in alliance talks with another Singapore-based LCC, Valuair. In the first major consolidation move in the Asia market, Ken Ryan, CEO of Jetstar Asia, which is 49% owned by Qantas, said the airline and Valuair "are exploring a variety of ways that they can work together or cooperate with each other."
The development reflects Jetstar Asia's frustrations at its inability to access rights to China and Indonesia and the heavy low-cost competition centered on Singapore, where three LCCs are based including Singapore Airlines' Tiger Airways, and a fourth operator, AirAsia, is active. Jetstar Asia, which began services last December, has withdrawn from the Singapore-Pattaya route and reduced its fleet requirements this year from eight to four A320s.
Privately owned Valuair, launched in May 2004 by former Singapore Airlines Vice Chairman Lim Chin Beng, also is facing considerable pressure in its home market. However, it has gained limited rights to serve Chinese destinations and also operates to Hong Kong, Jakarta, Bangkok and Perth. Tiger Airways, meanwhile, has announced plans to treble its fleet with the acquisition of a further eight A320s from March 2006.