Jetstar, AirAsia Form Alliance to Cut Costs

To cut costs and ticket prices, Jetstar and AirAsia have announced plans to pool some of their resources, an alliance that could revolutionize Asian budget air travel market, reveals an Agence France-Presse article published by the South China Morning Post.


"By getting together and focusing on areas where we can actually reduce costs, we think it's a really exciting opportunity," Jetstar chief executive Bruce Buchanan told AFP. Buchanan adds the non-equity arrangement, which he described as a world first between low-cost airlines, should save hundreds of millions of dollars in costs.


A subsidiary of Australia's Qantas Airways, Jetstar will share parts and ground and passenger handling services with Malaysia's AirAsia.


The AFP report says the airlines will also look into jointly procuring new aircraft, co-operate on buying engineering and maintenance supplies, and will carry each other's passengers stranded by breakdowns and other disruptions.