Jetstar and AirAsia form world first alliance

In a world first for low cost airlines, Jetstar and AirAsia have decided to form a new alliance that would reduce costs and result in cheaper fares for both carriers.

Published: 06 Jan 2010

In a world first for low cost airlines, Jetstar and AirAsia have decided to form a new alliance that would reduce costs and result in cheaper fares for both carriers.

The cooperative approach was a result of the two organisations’ strong focus on costs.

The agreement includes the development of cooperation in areas such as:

      • Future fleet specification – both carriers will investigate opportunities for joint procurement of the next generation of narrow body aircraft. A collective goal is to achieve cost reductions in terms of order volume and influencing design specification to deliver more efficient, low cost operations;
      • Airport passenger and ramp handling services – developing cooperative arrangements for the provision of passenger and ground handling in Australia and within Asia at overlapping airports by leveraging scale;
      • Shared aircraft parts and ‘pooling’ – pooling inventory arrangements for aircraft components and spare parts;
      • Procurement – Joint procurement, with a focus on engineering and maintenance supplies and services, with Jetstar maintaining its existing use of and commitment to Australian facilities; and
      • Passenger disruption arrangements – reciprocal arrangements for passenger management (i.e. support for passenger disruptions and recovery onto the other airline’s service) across both the AirAsia and Jetstar flying networks.
      • Future fleet specification – both carriers will investigate opportunities for joint procurement of the next generation of narrow body aircraft. A collective goal is to achieve cost reductions in terms of order volume and influencing design specification to deliver more efficient, low cost operations;
      • Airport passenger and ramp handling services – developing cooperative arrangements for the provision of passenger and ground handling in Australia and within Asia at overlapping airports by leveraging scale;
      • Shared aircraft parts and ‘pooling’ – pooling inventory arrangements for aircraft components and spare parts;
      • Procurement – Joint procurement, with a focus on engineering and maintenance supplies and services, with Jetstar maintaining its existing use of and commitment to Australian facilities; and
      • Passenger disruption arrangements – reciprocal arrangements for passenger management (i.e. support for passenger disruptions and recovery onto the other airline’s service) across both the AirAsia and Jetstar flying networks.
      • Future fleet specification – both carriers will investigate opportunities for joint procurement of the next generation of narrow body aircraft. A collective goal is to achieve cost reductions in terms of order volume and influencing design specification to deliver more efficient, low cost operations;
      • Airport passenger and ramp handling services – developing cooperative arrangements for the provision of passenger and ground handling in Australia and within Asia at overlapping airports by leveraging scale;
      • Shared aircraft parts and ‘pooling’ – pooling inventory arrangements for aircraft components and spare parts;
      • Procurement – Joint procurement, with a focus on engineering and maintenance supplies and services, with Jetstar maintaining its existing use of and commitment to Australian facilities; and
      • Passenger disruption arrangements – reciprocal arrangements for passenger management (i.e. support for passenger disruptions and recovery onto the other airline’s service) across both the AirAsia and Jetstar flying networks.
      • Future fleet specification – both carriers will investigate opportunities for joint procurement of the next generation of narrow body aircraft. A collective goal is to achieve cost reductions in terms of order volume and influencing design specification to deliver more efficient, low cost operations;
      • Airport passenger and ramp handling services – developing cooperative arrangements for the provision of passenger and ground handling in Australia and within Asia at overlapping airports by leveraging scale;
      • Shared aircraft parts and ‘pooling’ – pooling inventory arrangements for aircraft components and spare parts;
      • Procurement – Joint procurement, with a focus on engineering and maintenance supplies and services, with Jetstar maintaining its existing use of and commitment to Australian facilities; and
      • Passenger disruption arrangements – reciprocal arrangements for passenger management (i.e. support for passenger disruptions and recovery onto the other airline’s service) across both the AirAsia and Jetstar flying networks.
  • AirAsia Group CEO Tony Fernandes said a common aircraft type specification in terms of the next generation narrow body offering should be proactively pursued by both airlines because of the many efficiencies it would bring.

    “With joint purchasing power it means that we can potentially work with airline manufacturers on the right configuration and design of an aircraft specifically for AirAsia and that best suits our operational needs for the future,” Fernandes said.

    The two largest airlines in the Asia Pacific in revenue terms, Jetstar and AirAsia jointly earned nearly A$3 billion in revenues in the 2009 financial year

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