National flag carrier Vietnam Airlines has taken over the entire state-owned stake in the budget airline Jetstar Pacific.
Vietnam Airlines becomes the major stakeholder in Jetstar Pacific
In the deal struck on February 21, unprecedented in the industry, Vietnam Airlines will take over the portion of Jetstar Pacific formerly owned by State Capital Investment Corporation (SCIC).
As a result of the agreement, Vietnam Airlines will now become the major shareholder in the Jetstar Group, controlling almost 70% of the company.
Qantas is the second-biggest shareholder in Jetstar Pacific, with a 27% stake, with Saigontourist holding the rest.
With earlier approval from the Government, Vietnam Airlines has had plans to sell 3% of its share in Jetstar Pacific to Quantas in accordance to an agreement with SCIC.
Immediately after the acquisition, Duong Chi Thanh, Deputy General Director of Vietnam Airlines was appointed as Jetstar Pacific's Chairman of the Board.
According to information obtained by DTiNews, Le Hong Ha, Director of Vietnam Airlines' central branch, was appointed to become the Jetstar Pacific’s General Director.
Jetstar Pacific has plans to invest AUD25 million (USD26.61 million) in replacing its Boeing 737 fleet with Airbus A320 by mid 2012, as well as upgrading the fleet by 15 aircrafts in the time to come.
Pham Ngoc Minh, General Director of Vietnam Airlines, said that the acquisition would result in an advantage for the national flag carrier to combine the business strategy of budget airlines with the long experience in the aviation industry of Vietnam Airlines.
Bruce Buchanan, General Ditector of Jetstar, said that he is absolutely confident that such cooperation will attract more travellers who will use their service in Asia, including Vietnam.
Under the leadership of SCIC, Jetstar Pacific Airlines has been taken losses for many years.
To improve the situation, the Prime Minister approved the takeover by Vietnam Airlines of Jetstar Pacific.
Currently, Vietnam Airlines accounts for 80% of the local aviation market.
