28 March 2011

Expedia/Air Asia JV - Impact for AK/DJ/QF/JK Relationship.

There is a lot of HooT and Hollerin' going on In Singapore right now. The wraps have come off a deal in the making for a while. Expedia and Air Asia have announced a far embracing global alliance that covers three separate JVs.

But while this is all going on - you have to wonder about what is going on back in Sydney and Melbourne. There is probably a little consternation.

There have been several mutual relationship deals between Qantas Group line - Jetstar and Air Asia. The most visible of these is a wide ranging arrangement on procurement. In addition there have been a number of possible arrangements mooted between Air Asia and both Virgin Group and Qantas. Have a listen to some of the discussion on the prospects for Qantas/Jetstar and Air Asia on CNBC Oz.

However you have to think that there is a little consternation. Jetstar has jumped into the long haul market by positioning some A330s in Singapore and providing traffic between a number of cities. The traffic race between Singapore/Malaysia and Australia is hotting up.

This announcement must surely put paid to any thought of passenger cooperation between Qantas Group and Air Asia. Will this drive Tony Fernandez into the arms of Virgin Blue. John Borghetti is a savvy operator and he is likely to be thinking about this - especially today. He already has protected his flank with a deal with southern neighbour Air New Zealand. A long haul partnership to rival Emirates has been formed with Etihad. That leaves a strong need for an Asian partner. Air Asia just might be the right player for this.


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