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Lion Air sniffs Jetstar Asia and AirAsia warns Lufthansa

July 17, 2014 Aviation, Headline News No Comments Email Email

egtmedia59Much is happening in the volatile low-cost carrier arena in the Asia Pacific region. Indonesia’s Lion Air is said to be talking with Qantas about buying a stake in Jetstar Asia Airways, the Singapore-based affiliate of Qantas budget carrier Jetstar.

The talks to buy out Qantas’ 49% stake in Jetstar Asia have been continuing, on and off, for months, with no firm proposal emerging, Reuters news agency reports.

All the airlines concerned declined to comment, saying the reports were speculation, though none said the reports were wrong.

Lion Air, Indonesia’s largest privately run carrier, is growing rapidly and has over 500 aircraft on order. Lion’s safety record is patchy, however, carrier having famously overshot a runway and landed in the sea in April 2013. Then, five months later, Lion crashed one of its planes into a cow and skidded off a runway. Nobody died in either incident, except the cow.

Lion chief executive Rusdi Kirana said earlier this year he aimed to have 1000 planes operating by 2030.

The majority of Jetstar Asia, 51%, is owned by interests associated with a Singapore travel agency tycoon: Dennis Choo. The airline flies to Bali, Phuket and Hanoi and over 15 other destinations.

Qantas announced in February that it was suspending Jetstar Asia’s expansion. Orders for future delivery of A320s have been pushed back beyond 2020. Another project, Jetstar Hong Kong, appears to have stalled, with planes sitting on various tarmacs.

MEANWHILE, the head of Asian low-cost airline AirAsia, Tony Fernandes, has warned Lufthansa that any potential expansion into budget long-haul flights would be a risky business.

Last week, Lufthansa’s new chief executive Carsten Spohr spoke of expanding into low-cost long-haul travel. See Lufthansa plans launch of new airline and eyes Australia

Fernandes said it was “dangerous” to have a low-cost and a full-service carrier in the same group “because invariably you compete with each other”. His comments could apply equally to Qantas, which is in that position.

Fernandes said he considered the Lufthansa plan “very risky” and would advise against it.

Lufthansa has politely indicated that it can make its own decisions.

Written by : Peter Needham

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