Qantas has confirmed that Jetstar has entered into talks with AirAsia over a “potential cost saving joint venture”, although indications are that it will not involve merging the two low cost carriers.
Qantas released a statement to the Australian Securities Exchange on December 18 confirming that the two have been involved in preliminary discussions, but no binding agreements have been reached. Some reports claim that the proposed joint venture would seek cost savings through joint procurement of aircraft, spares, ground handling services and other items between the two carriers, although Qantas has not specified what is being discussed between the two.
It is believed that the joint procurement could yield cost savings of 5-10 per cent due to the joint buying power, with the greatest commonality between the two airlines’ fleets of A320 narrowbodies, although they have different engines. Jetstar’s A320 Family aircraft are powered by IAE V2500s while AirAsia’s A320s are powered by CFM56s.