South East Asia alliance

AIR ASIA & JETSTAR are to form an alliance, claimed to be the first organised by two low cost carriers anywhere in the world.  Although established in 1993 Air Asia really dates from 2001 when it was taken over for a nominal sum by a group headed by former Virgin Atlantic executive Tony Fernandes.  Jetstar is 100% owned by Qantas.  Both airlines compete in a market that also includes Singapore Airlines subsidiary Tiger Airways.  In a statement the two budget airlines said they would focus on a range of major cost reduction opportunities.  Key to the agreement is a proposed joint specification for the next generation of narrow body aircraft but probably just as important is an anticipated arrangement to pool ground handling airport passenger services. www.airasia.com www.jetstar.com

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