Jetstar Reveals Growth Plans for New Japan Venture

Jetstar has revealed plans to attract another partner for its new Japan venture, the Jetstar Japan, adding up to the budget airline's present investors - Japan Airlines and trading firm Mitsubishi.

As part of Qantas', Jetstar's mother company, restructuring efforts for its ailing international services, Jetstar Japan is seen by the airline to beef up its regional strategy with focused on servicing flights within the world's third biggest economy.

Jetstar chief executive Bruce Buchanan told The Australian that the low-cost airline is considering two locations for its operational hub - Tokyo and Kansai.

From there, Buchanan said Jetstar Japan will service flights in and out of Sapporo, Fukuoka and Okinawa, with plans of adding more destinations in the immediate future, serving as the anchor of the company's pan-Asian expansion plans.

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That growth plan, Buchanan said, is hoped to generate at least $2.5 billion in the near term.

For starters, however, Jetstar Japan needs to strengthen its current standing, which according to Buchanan carries a start-up capital of $150 million, with up to 24 aircrafts to support its initial Japanese service flights.

Jetstar has scheduled for flights to commence by the last quarter of 2012, with a specific target of generating $1 billion in total revenues over the next two years, The Australian wrote.

To ensure greater success for the new Qantas investment, Jetstar is looking for another investor that will be given half the 16 percent stakes currently maintained by Mitsubishi.

This fourth entity, Buchanan said, will enjoy equal voting rights with Jetstar, Japan Airlines and Mitsubishi.

Transactions have already commenced and barring any major glitches, a deal could be struck early next year, Buchanan said.

"It is not too far away. Once we knuckle through things, it will be three to four months," the Jetstar chief was quoted by The Australian as saying in hinting the possibility of a closed deal by early 2012.

"There are quite a few interested parties up there. It is a great time to get in at this stage for what we think will be an exciting opportunity. We want to ensure that the partner we bring on brings maximum strategic advantage for the business," Buchanan added.

Source: http://www.ibtimes.com/articles/273342/20111228/jetstar-reveals-growth-plans-new-japan-venture.htm

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