Outlook of Jetstar Pacific uncertain with possible Vietnam Airlines stake

The future of Jetstar Pacific, the Vietnamese low-cost subsidiary of the Qantas Group, is uncertain following various reports state-owned Vietnam Airlines may takeover the 70% local shareholding from other state-owned companies, Saigontourist and the State Capital Investment Corporation. Vietnam Airlines already has dealings with the Qantas Group by way of a codeshare on flights between Australia and Vietnam.

While the transfer, if it proceeds in the medium- or long-term, may appear to be a paperwork exercise, it could change Vietnam's emerging low-cost carrier market, which at 18.6% has one of the lowest domestic penetration rates in Asia and the world. It is an evolving story we have been following, and one that shifted when Vietnam Airlines announced its intention to launch its own LCC unit by 2014, as we reported last month.