SINGAPORE : Singapore-based budget carriers Jetstar Asia and
Valuair have merged, the firms said Sunday, in the first major
consolidation of Southeast Asia's crowded low-cost airline
industry.
"Jetstar Asia and Valuair today announced the formation of a new
Singaporean company that will own and operate both airlines," the
companies said in a joint statement.
Qantas-backed Jetstar Asia and Valuair said they would continue to
operate their normal routes under their own brands "for the
foreseeable future, with little or no change to the service offered
by either airline".
Qantas chief executive officer and Jetstar Asia chairman Geoff
Dixon will chair the new company, which has yet to be given an
official name publicly.
Jetstar Asia chief executive officer Ken Ryan has been appointed as
chief executive of both airlines.
The announcement comes after nearly a month of speculation about
consolidation within the region's budget airline industry.
The Jetstar Asia-Valuair merger had already been floated in the
press and rejected publicly by the two firms, while Malaysian
low-cost heavyweight AirAsia had also revealed it had held talks
with Valuair.
Southeast Asia's fledgling low-fare airline industry has been under
pressure to consolidate amid tough competition, soaring jet fuel
costs and reluctance by governments to open up their domestic
aviation sectors.
Jetstar Asia, Valuair, AirAsia and Singapore Airlines-backed Tiger
Airways had all begun services in and out of Singapore since the
middle of last year with some tickets costing less than a train
fare between the same destinations.
Jetstar Asia, in which Qantas has a 49 percent stake, and Valuair
did not reveal any details on Sunday of the merger.
However the Business Times newspaper said last week the deal was
expected to hinge on the injection of more than 50 million
Singapore dollars (30 million US) in fresh capital into the new
entity, largely to be provided by Qantas.
Investment company Temasek Holdings, which owns 19 percent of
Jetstar, could also put up fresh capital, the report said.
Shareholders of Valuair, including airline industry veteran Lim
Chin Beng, Malaysia's Star Cruises and Asiatravel.com, would become
minority shareholders in the merged company, according to the
paper.
Jetstar Asia flies between Singapore India, Hong Kong, Bangkok,
Manila and Taipei. Valuair flies between Singapore and Hong Kong,
Jakarta, Perth and Bangkok.
- AFP /ct