Qantas has confirmed it will exit its minority stake in Vietnamese airline Jetstar Pacific.
The Australian flag-carrier is expected to hand full control of the budget carrier over to co-owner Vietnam Airlines.
In a statement, Vietnam Airlines confirmed the carrier will return to its original brand name, Pacific Airlines.
The re-branded airline will feature a new logo and livery inspired by Vietnam Airlines’ brand colours and design.
The airline will also change its reservation system from Navitaire to Sabre, to allow the low-cost carrier to streamline its bookings, network and customer functions.
Vietnam Airlines executive vice president and Pacific Airlines chairman, Trinh Hong Quang, said the change would unlock economies of scale and help the industry to embark on a post Covid-19 recovery.
“Low-cost carriers will play a certain role in supporting the return of travel as restrictions ease, and by streamlining functions, Pacific Airlines can remain competitive, inherit many of the efficiencies of Vietnam Airlines and continue to offer the low fares our customers expect.”
He added: “We are optimistic that the dual brand strategy will leverage the brand and resources of Vietnam Airlines, and by undergoing innovation and improvisation, we will continue to see Vietnam Airlines Group maintain its position of leadership in the Vietnamese domestic market now and into the future.”
Gareth Evans, chief executive of Qantas’ budget division Jetstar, said the group would offload its 30 per cent stake in Jetstar Pacific “in the coming months”, pending regulatory approvals, so it can “focus on our other airlines”.
He added: “With a highly competitive domestic market in Vietnam and the disruption caused by the coronavirus, the time is right to take advantage of the strength and scale of Vietnam Airlines in its home market.
“Streamlining customer and booking functions will enable further cost savings and position the airline for a stronger future as international travel restrictions ease.”
Qantas established Jetstar Pacific in 2007 when it paid the Vietnamese government $30 million for a stake in the local carrier Pacific Airlines, as part of a strategy to build up its presence in Asia through joint-venture partnerships using the Jetstar brand.
However, Jetstar Pacific - which has a fleet of 15 Airbus A320s - has been loss-making for much of its history, and has faced stiff competition following the launch of rival budget carriers VietJet and Bamboo Airways.