Australia’s Qantas is considering selling its stake in low-cost airline Pacific Airlines to joint venture partner Vietnam Airlines, according to a press report.
This will be transferred at no cost and the deal is expected to be finalized by the end of October, Asia-focused Nikkei-owned financial publication DealStreetAsia reported on October 16, citing Vietnamese media reports.
He quotes Vietnam Airlines as saying he has been in contact with the relevant authorities and is working on an official announcement that could arrive by the end of October.
Cirium has contacted Vietnam Airlines for comment. Qantas’ Jetstar declined to comment on the deal, citing commercial confidentiality.
Vietnam Airlines told Cirium it had no further comment, adding: “Everything is pending government approval.”
Pacific Airlines was the only LCC in Vietnam and was renamed Jetstar Pacific as of May 2008 as part of a commercial services agreement and a branding agreement with Jetstar, according to a Qantas report for the year ending June 30, 2009.
Under these agreements, Jetstar provides a wide range of commercial services, common branding and distribution agreements.
Qantas then held 27% of LCC’s capital and in February 2012 increased its stake to 30% “in accordance with long-term commitments”.
In June, the LCC announced it would revert to its old name “to take advantage of the scale and brand strength of majority shareholder Vietnam Airlines in its home market.”
The airline said its joint venture partners will continue to review its structure and future shareholding arrangements, saying, “These changes are aimed at improving the profitability of the low cost carrier in response to the impact of Covid-19.”
Story updated to include response from Jetstar and Vietnam Airlines.