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Qantas finds innovative way to fund Jetstar Pacific

July 23, 2014 Aviation, Headline News 2 Comments Email Email

egtmedia59Jetstar’s Vietnamese offshoot, Jetstar Pacific, has received a USD 35.7 million (AUD 38 million) capital injection to help fund its expansion.

Vietnam Airlines, which holds the lion’s share of the airline (70%), has contributed the lion’s share of the funds – USD 25 million in fresh equity to the recapitalisation.

Qantas, which owns the remaining 30 per cent, has found a rather more innovative way of funding its share. According to a Sydney Morning Herald report, Qantas won’t have to inject any cash at all.  It has agreed with Jetstar Pacific that a USD 10.7 million debt that Jetstar Pacific owes Qantas will be forgiven.

A Jetstar spokeswoman said that the commitment by both shareholders to the funding was made in 2012, this second tranche was in line with planned investment and did not represent any new request or recent requirement by Jetstar Pacific for fresh capital, the paper reported.

Qantas contributed USD 7.5 million to the first tranche of USD 25 million in funding for the Vietnamese budget carrier.

Jetstar carriers in Asia include offshoots in Singapore and Japan and a proposed venture in Hong Kong that is still stuck on the ground, with planes parked on various tarmacs. Jetstar Hong Kong has not received regulatory approval from the Hong Kong government.

Jetstar Pacific, the smallest Jetstar franchise, has a fleet of seven A320 aircraft (maybe 10 by year end), nine destinations and 298 flights a week.

Written by : William Sykes

Currently there are "2 comments" on this Article:

  1. AgentGerko says:

    So presumably by forgiving the debt this will once again weaken Qantas’ books in order to make jetstar appear bettter than it actually is.

  2. Mark C says:

    Innovative = dodgy . How much of the principal from the original loan is left ?

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