Vietnam Airlines President and CEO, Dr. Pham Ngoc Minh (left), and Jetstar Group CEO, Mr Bruce Buchanan, at the signing of the partnership agreement on Jetstar Pacific.

(CPV) – The national flag carrier, Vietnam Airlines, will take the majority share in Jetstar Pacific, currently held by the Vietnamese State Capital Investment Corporation (SCIC) under the decision No 94/QĐ –TTg dated January 16, 2012 of the Prime Minister Nguyen Tan Dung.

Under the cooperation arrangement signed in Hanoi on February 21, Vietnam Airlines will hold 69.93 percent of the low-cost carrier, while the Australian Qantas Group, owns 27 percent.

Separately, the Qantas Group’s existing 27 per cent share in Jetstar Pacific has now increased to 30 per cent in-line with long-term commitments.

The new partnership with Vietnam Airlines would represent an extension of the dual brand strategy pioneered by Qantas and Jetstar, in one of the world’s fastest growing aviation markets, as well as brings together the proven low cost model of Jetstar with the unique local knowledge and its existing networks.

“It would strengthen Jetstar Pacific’s ability to create new travel demand in the third most populous nation in Southeast Asia. Across Asia, we are seeing the positive impacts of introducing a new generation of customers to air travel, including Vietnam where the penetration of low cost carriers is still relatively low”, said Chief Executive of the Jetstar Group, Bruce Buchanan.

Jetstar Pacific will receive an initial capital injection of 25 million AUD, including 7.5 million AUD from the Qantas Group. This will be directed towards fleet renewal, with the carrier’s current Boeing 737s replaced with new A320s from mid-2012. Moreover, the shareholders support Jetstar Pacific’s fleet to grow to 15 A320s within the next few years.

Formerly known as Jetstar Airlines with five Boeing B737-400 and two Airbus A320-200s aircrafts, It operates almost 150 services a week to seven destinations within the nation including Da Nang, Hanoi, Hai Phong, Ho Chi Minh City, Hue, Nha Trang, and Vinh; and connects with Jetstar’s international network through flights to Singapore.

According to International Air Transport Association, Vietnam will become the world’s second fastest growing aviation market for domestic passengers by 2014./.