A strong regional carrier in the making

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KUCHING: The Centre for Asia Pacific Aviation (Capa), the leading global aviation intelligence provider, published its response to this week’s signing of a landmark alliance between Qantas Airways Ltd, Jetstar Airways Pte Ltd and AirAsia Bhd (AirAsia).

Capa noted that there is ‘ample logic’ in expanding the Australia-Malaysia aviation axis.

AirAsia in a press statement said Capa observed that Qantas, under its then chief executive officer Geoff Dixon’s leadership, was keen on a Malaysian linkage for quite some time.

Apart from cultivating a relationship with AirAsia group’s chief executive officer Tony Fernandes, Dixon was previously responsible for getting almost to the finish line with a proposed ‘merger’ with Malaysia’s flag carrier, Malaysia Airlines, in late 2008, just as Qantas chief executive officer Alan Joyce took over the reins at Qantas.

It also observed that it was to involve commercial cooperation and profit sharing and the partnership clearly presaged a wider joint relationship.

Interestingly, it would have become a three-way merger, with Qantas also effectively taking over British Airways (BA). But all that faltered as MAS and the government lost momentum, along with the global economy.

On the other hand, AirAsia’s tie up with the powerful Qantas Group will do nothing to reduce the Malaysian flag carrier’s problems. It may well even bring things to a head. MAS is going to need to take some difficult decisions.

AirAsia noted that with market demand set to remain slow in 2010, as MAS’ recent deterioration into loss making and its relatively poor performance, the majority government-owned carrier cannot afford to stand still.

In the meantime, a strengthened AirAsia relationship with Qantas Group will heighten that awareness.

The twin-brand Qantas/Jetstar, full service/low cost model has been a world leader, helping preserve the group’s position domestically and internationally and a similar matching of resources could also work in the Malaysian market, between MAS and AirAsia.

As Datuk Seri Tony Fernandes frequently suggested that the future of the international airline marketplace will be similar to the domestic one, there will be two types of carrier, one which focuses on premium travellers and the other which targets the low cost, discretionary travel end.

He saw AirAsia as the latter of these, with MAS providing the other limb, not dissimilar from Qantas/Jetstar. He projected that the scenario would be the model of the aviation industry for the future.

For more responses and comments from Capa about AirAsia and Jetstar patnership, visit its website at www.centreforaviation.com.