More Berating from Tony Davis

Tony Davis.jpgTiger Airways group CEO Tony Davis (right) is at it again, dismissing the AirAsia-Jetstar JV. Last month when he proclaimed the JV was “doomed”, his action was almost excusable given some cheap shots Qantas CEO Alan Joyce made.

As my colleague Ghim-Lay Yeo reports, Davis has branded the JV as “nothing more than a publicity stunt”. He again points to the facts 1. AirAsia is going to start–albeit with a minority share–a subsidiary in Vietnam, and 2. Jetstar has ordered IAE-powered A320s despite Pratt & Whitney supplying power plants for AirAsia’s A320s.

I’ll break it down briefly this time (here’s the full explanation):

1. The AirAsia-Jetstar JV is a non-equity alliance. It’s primarily concerned with reducing cost. Thus it’s perfectly fine for AirAsia to start an airline in Vietnam, home to Jetstar’s Vietnamese subsidiary, Jetstar Pacific.

2. At list prices, Jetstar would spend US $3.5 billion to purchase engines for 50 A320s. You can bet Jetstar did the math and found IAE’s offer is better, even with long-term maintenance factored in.

It seems the real publicity stunt is coming from Tiger.


Photo: Tiger Airways



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