Qantas Airways Ltd's <QAN.AX> low-cost arm Jetstar said on Monday it planned to cease being a shareholder in its Jetstar Pacific joint venture in Vietnam with Vietnam Airlines JSC <HVN.HM> in coming months, subject to approvals.
Australia-based Jetstar owns 30% of Jetstar Pacific, and Vietnam Airlines holds 70%.
Jetstar CEO Gareth Evans said in a statement his airline had been in talks with Vietnam Airlines about challenges facing Jetstar Pacific that had intensified during the COVID-19 crisis.
Jetstar Pacific will return to its original name, Pacific Airlines, pending government and regulatory approvals, the carriers said in a joint announcement.
Pacific Airlines will have a new logo and livery inspired by Vietnam Airlines' brand colours and design, and switch to a new reservation system, the companies said, adding the changes were meant to improve the airline's profitability.
The Vietnam domestic aviation market, one of the world's fastest-growing before the pandemic, is highly competitive and dominated by budget carrier VietJet Aviation JSC <VJC.HM> and Vietnam Airlines.
"Low-cost carriers will play a certain role in supporting the return of travel as restrictions ease," Vietnam Airlines Executive Vice President Trinh Hong Quang said, adding he was optimistic that a dual-brand strategy would help it retain a position of market leadership.
Qantas Chief Executive Alan Joyce had said last month his airline was in talks with Vietnam Airlines about the future of Jetstar Pacific. Jetstar's offshoots in Singapore, Japan and New Zealand remain core assets, Joyce said at the time.
(Reporting by Jamie Freed; Editing by Tom Hogue and Gerry Doyle)
