The Associated Press is reporting a new alliance between Air Asia and Jetstar, two of Asia’s biggest budget airlines.
The alliance includes cooperation on passenger handling and the potential to purchase aircraft together.
Jetstar is a unit of Australia’s Qantas Airways and AirAsia is based in Malaysia.The airlines hope the alliance helps cut costs, although AP reports that AirAsia profited in the third quarter of 2009 and Qantas reports profit in the second half of 2009.
“Jetstar and AirAsia offer unmatched reach in the Asia-Pacific region … and this new alliance will enable them to maximize that scale,” Qantas Airways CEO Joyce said in a statement.
The CEOs of both companies said the move is a logical one that will create a natural advantage for the airlines as travelers turn to budget carriers.
“AirAsia strongly believes the strategic tie-up will help the airline maintain its position as the lowest-cost airline in the world despite rising costs associated with the fledgling global economic recovery,” AirAsia CEO Tony Fernandes said in the statement.
Analysts attribute this alliance to the tough aviation industry, AP writes. The alliance will allow an increase in bargaining power over competitors.
Shukor Yusof, an aviation analyst with Standard and Poor’s in Singapore, stressed the importance of industry consolidation and cooperation to AP.
