Jetstar Pacific is set to become a wholly-owned subsidiary of Vietnam Airlines after Qantas confirmed that it intends to offload its minority stake in the carrier “in the coming months”.
The Flying Kangaroo is expected to hand full control of its 30 per cent stake in Jetstar Pacific to co-owner of the budget carrier, Vietnam Airlines.
The two have been in discussions about the sale since April.
Gareth Evans, chief executive of Qantas’ budget division Jetstar, told The SMH that the divestment would occur within months, pending regulatory approvals, so that the Jetstar brand can “focus on our other airlines”.
“We’ve been in discussions with Vietnam Airlines for some time about the challenges facing Jetstar Pacific, which have obviously intensified through the COVID crisis,” Evans said in a statement.
Jetstar Pacific was established in 2007 when Qantas paid US$30 million to the Vietnamese government in exchange for an initial stake of 18 per cent in local carrier Pacific Airlines, with arrangements to eventually increase to 30 per cent ownership.
The airline’s name was changed in 2008 to reflect the Jetstar brand, as the Qantas Group worked to build up its presence in the Asia-Pacific region through such joint-venture partnerships.
Despite being the first of its kind, the Vietnamese budget carrier unfortunately struggled to turn a profit throughout the partnership, as the market became saturated with rival budget airlines including VietJet and Bamboo Airways.
Jetstar Pacific will reportedly revert back to its inaugural brand, Pacific Airlines, following the divestment, while its processes will become largely integrated into its now sole parent company, Vietnam Airlines.