Asia Pacific airlines to buy collaboratively

6 January 2010
6 January 2010 | Jake Kanter

Budget airlines Jetstar and AirAsia have entered a joint procurement agreement in a bid to cut costs.

The move is thought to be a world first for low-cost airlines and will help the companies maintain cheaper fares.

Unveiling the agreement today, Jetstar’s parent company Qantas Airways said the two firms aim to purchase engineering and maintenance goods and services together, as well as ground handling services. In addition, the airlines will investigate the potential to co-source aircraft.

As part of the scheme, the companies will also pool inventory arrangements for aircraft components and spare parts.

Qantas did not disclose the value of spend Jetstar and AirAsia will combine, nor were any savings targets revealed.

“Today’s announcement breaks the mould of traditional airline alliances and establishes a new model for achieving reduced costs and increased efficiency,” said Qantas chief executive Alan Joyce. He added that cutting costs would help the firms take advantage of growth opportunities in the Asia Pacific market.

AirAsia CEO Tony Fernandes added: “With joint purchasing power it means we can potentially work with airline manufacturers on the right configuration and design of an aircraft specifically for AirAsia and that best suits our operational needs for the future.”
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