Jetstar Pacific Airlines

Jetstar Pacific Airlines

IATA BL ICAO PIC Callsign PACIFIC
Founded	December 1990 (as Pacific Airlines)
Commenced operations	April 1991
Hubs	Tan Son Nhat International Airport
Fleet size	10
Destinations	13
Company slogan	It's All About Choice
Headquarters	Ho Chi Minh City, Vietnam
Key people	Duong Tri Thanh (Chairman)[1] Le Hong Ha (CEO)[1]
Website	jetstar.com

Jetstar Pacific Airlines Joint Stock Aviation Company (operating as Jetstar Pacific) is a low-cost airline headquartered in Tan Binh District, Ho Chi Minh City, Vietnam.^[2] With its hub at Tan Son Nhat International Airport, Ho Chi Minh City,^[3] operates scheduled domestic and international services along with charter flights.

The airline, formerly known as Pacific Airlines, began operations in 1991, flying chartered cargo services. From 1996 to 2005, the airline, along with other local companies, operated under the government-owned Vietnam Airlines Corporation. Having by now operated passenger services, Pacific Airlines then came under the control of the government itself. In 2007, the Vietnamese government sold a portion of its shares to Qantas, and as such airline adopted a low-cost operations model and adopted its current name on 23 May 2008, becoming part of the Jetstar network.^[4][5]

In February 2012, Vietnam Airlines bought a 70% stake in the company. As part of its expansion plan, it is intended that Jetstar Pacific will have up to 15 Airbus A320 aircraft by the end of 2015.^[1]

History

Early operations

A Pacific Airlines Boeing 737-300 in Berlin, 1996.

Pacific Airlines was established in December 1990 and began operations in April 1991 with a start-up capital of US$2.47 million. It was the first carrier to be established in Vietnam following reforms that permitted foreign investment in the country's airlines. Pacific Airlines operated chartered cargo flights to Thailand, Pakistan and France in cooperation with AOM French Airlines.^[6][7][8] In 1993, prior to the lifting of the US embargo against Vietnam, the airline signed a deal with United Airlines that would have involved the training of Pacific Airlines' personnel and which had provisions for cooperation on US–Vietnam services.^[9]

In 1994, the Civil Aviation Authority of Vietnam (CAAV) proposed plans to the government about the possible trading of minority stakes of Vietnam Airlines, VASCO and Pacific Airlines to investors. With the lifting of the US embargo, the country was looking for funds for aircraft procurements.^[10] Such plans did not materialise. However, in 1996, Pacific Airlines was consolidated with several air-service companies, including Vietnam Airlines, to establish Vietnam Airlines Corporation.^[11] During the same year, Pacific Airlines wet-leased a Boeing 737-300 from Swiss charter carrier TEA Basel. In addition to its jointly serviced cargo destinations, Pacific had by now opened services to Hanoi, Hong Kong and Taipei.^[12][13]

In 2000, Pacific entered into an agreement with Greek charter airline Galaxy Airways whereby the Vietnamese carrier would operate flights to Taipei on its behalf.^[14] In 2001, the airline's revenues totalled US$48 million, having made 3,600 flights using an Airbus A310 and two A321s.^[15] From 2001 to 2004, a succession of regional and global events, namely the September 11 attacks, the 2003 invasion of Iraq, the SARS outbreak and a rise in oil prices, as well as misguided management decisions, contributed to a cumulative loss of more than US$13 million at the airline.^[8] Consequently, Vietnam Airlines Corporation in late 2004 submitted a report about Pacific Airlines to the government, who decreed that all of the carrier's shares belonging to the corporation must be transferred to the Ministry of Finance (MoF).^[16] As a result, the MoF assumed control of 86.49% of shares, with Saigon Tourist (13.06%) and Tradevico (0.45%) making up the rest.^[17]

The Ministry in January 2005 announced plans to sell all of its shares to increase the available capital by 20 times^[8][18] One prospective investor was Temasek Holdings, who was looking to inject US$50 million to revive the business, which might have entailed launching passenger flights to Japan, South Korea, Malaysia, Singapore and Thailand.^[18][19] Talks with various parties fell through. It was not until January 2007 when rumours circulated about another prospective investor.

Restructuring and expansion

Australian airline Qantas was in talks with the State Capital Investment Corporation (SCIC), who was then managing the government's stake in Pacific Airlines, about a possible investment in the carrier.^[20][21] Three months later, Qantas agreed on a minority stake in Pacific as part of its plan to expand its low-cost operations through Jetstar in Southeast Asia. The deal was finalised in July when Qantas acquired an 18% stake for US$30 million, with provisions to eventually increase the stake to 30%; SCIC held the majority of the remaining shares. The deal would see the carrier, now restructured into a low-cost airline, launch flights to the surrounding countries, and possibly southern Europe, with a fleet of 30 Airbus A320s by 2014; it would be renamed Jetstar Pacific Airlines in May 2008.^{[22][23][24][25]}

As a low-cost carrier, JPA commenced flights to Nha Trang and Da Nang.^[26] Due to high fuel costs, Nha Trang was suspended, and the airline lost $22 million during the first ten months of 2008. Passenger service launches to Bangkok and Siem Reap were deferred, and SCIC stated the airline would need US$35 million to operate in 2009.^[27][28]

Jetstar Pacific embarked on its fleet modernisation plan in 2009, as it replaced several Boeing 737-400s with leased A320s. It made its first profit (US$1.1 million) in July that year after long periods of losses. The airline expanded its domestic market share as it transported more than 1.5 million passengers in the first half of 2009.^[29][30] Despite these developments, the airline encountered branding issues when the CAAV in October decreed that it must replace its Jetstar brand and logo with a new identity; the CAAV cited possible consumer confusion with Jetstar Airways and that a foreign airline could potentially exploit the Jetstar Pacific's branding to advertise it products. Later that year, CEO Luong Hoai Nam suddenly quit the airline having served since 2004.^[29][30][31]

In January 2010, clarifications about Nam surfaced when Vietnamese authorities reportedly detained the former CEO and prevented COO Daniela Masilli and CFO Tristan Freeman from leaving the country. This was part of an investigation into fuel hedging losses, which reportedly had cost the airline US$31 million.^[32][33][34] Qantas responded to the complication by replacing the two administrators.^[35] Due to the investigation into fuel-hedging allegations, growth plans at the airline were stalled.^[36]

Funding issues persisted through 2011. In addition to the fuel price fluctuations, compounded by the government-sanctioned fare cap, JPA had to address lease and maintenance fees for its aircraft.^[37] During the year, reports indicated that VAC would re-assume control of the carrier; according to Saigon Tiep Thi, the SCIC would transfer 70% of its shares to Vietnam Airlines. However, the Jetstar Group denied such speculation.^[38][39] On 16 January 2012, the Vietnamese government confirmed the allegations by Saigon Tiep Thi by decreeing a transfer of SCIC shares to Vietnam Airlines, which took place in February.^[40][41] The transfer brought forward plans by Vietnam Airlines to have its own LCC by 2014.^[36] As part of its current expansion plan, it is intended that Jetstar Pacific will have up to 15 Airbus A320s by the end of 2015.^[1]

Destinations

Jetstar Pacific operates more than 40 daily flights to domestic destinations from its main hub at Tan Son Nhat International Airport.^[42]

Fleet

Jetstar Pacific new livery applied on an Airbus A320 with Winglets equipped.

Jetstar Pacific has an all-Airbus fleet, having retired its last Boeing 737-400 in January 2013.^[43] As of February 2015, its fleet age stood at 7.1 years:

Services

As a low-cost carrier, Jetstar Pacific does not include in-flight catering in its fares. Instead it has a buy-on-board service offering food and drinks for purchase.^[44] Unlike its sister carriers, JPA does not operate medium-haul routes, and as such does not offer in-flight entertainment.^[45]

See also

• Air transport in Vietnam
• VietJet Air

References

External links

Wikimedia Commons has media related to Jetstar Pacific.

• Jetstar Vietnam
• Pacific Airlines official website at the Wayback Machine

Airlines of Vietnam Scheduled passenger airlines Hai Au Aviation Jetstar Pacific Airlines (BL) VietJet Air (VD) Vietnam Air Service Company (VASCO) (0V) Vietnam Airlines (VN) Charter passenger airlines Northern Service Flight Company Southern Service Flight Company Cargo airlines Trai Thien Air Cargo Vietnam Airlines Cargo Defunct airlines Air Vietnam Air Mekong COSARA Indochina Airlines