Jetstar Pacific says will work with authorities over brand
By Mong Binh - The Saigon Times Daily
HCMC - Jetstar Pacific will meet relevant authorities to clarify everything in relation to the use of Jetstar brand, following comments over the allegedly inappropriate use of a foreign brand to promote a foreign air carrier.
Jetstar Pacific chief executive officer Luong Hoai Nam confirmed with reporters in HCMC last week that the Vietnamese low-cost air carrier was ready to cooperate with relevant agencies to settle any problem with this airline’s use of Jetstar brand and logo in Vietnam.
“We have enough patience to make clear any point in our legal brand and franchise deals,” Nam answered to the Daily’s question about the controversial issue. He added the Jestar brand issue was very common as it was used for the first time by a Vietnamese airline.
Nam spoke out the point not long after Minister of Transport Ho Nghia Dung told the online publication VnExpress.net that unclear problems with Jetstar Pacific should be tackled and that the ministry provided favorable conditions for airlines to operate.
Dung said the difference between the Civil Aviation Administration of Vietnam (CAAV) and the carrier was a common issue arising when the Law on Civil Aviation was enforced.
Dung said Jetstar Pacific’s use of Jetstar brand as a result of its partnership with Australia’s Qantas Group should not be a problem, but CAAV was concerned about the possibility of a foreign airline taking advantage of this to promote its image in the domestic market.
In its recent report submitted to the ministry last month, CAAV complained over Jetstar Pacific using the Jetstar logo, or the Jet and the orange star for its services.
CAAV deputy director general Lai Xuan Thanh told the Daily that such advertisement caused people to misunderstand Jetstar Pacific with Jetstar Airways under Qantas Group.
Nam said none of the nearly 2.5 million passengers had ever asked for the clarification between Jetstar Pacific and Jetstar Airways since the carrier first used the Jetstar brand in Vietnam in May 2008.
The brand issue and relevant agreements had been approved in Vietnam, Jetstar chief executive officer Bruce Buchanan told the Daily when he was in HCMC last week.
Jetstar Airways clarified in its statement that the Qantas Group and the Vietnamese Government defined the use of the Jetstar brand within Vietnam as fundamental to the transformation of the former Pacific Airlines into the successful low cost carrier.
So, Jetstar rejected the “incorrect” comments about the use of Jetstar brand in Jetstar Pacific and said that these criticisms were harmful to the growing Vietnamese business.
Jetstar Airways said the cross-border use of the branding was standard international practice, and one that already had precedence in the aviation industry in the Asia Pacific. Jetstar is now one of the most successful flying brands in Asia and provides real opportunities for Vietnam to participate in its future growth, Buchanan said.
He said the Jetstar brand gave Jetstar Pacific significant benefits, including the opportunity for the carrier to attract new customers from more markets, post strong revenue growth and benefit from the expertise of the Australian airline.
Jetstar Pacific was profitable for the first time in July and Nam disclosed the carrier gained a profit of US$1.1 million. He said the airline broke even around these months.
The carrier transported almost 1.5 million passengers in the first six months of 2009, up 34% over the same period last year, and 510,000 in the third quarter, a year-on-year rise of 43%. Jetstar Pacific’s market share rose to 23% from 14% since the re-branding.
As for the traffic rights, Jetstar Airways said the rights used by the airline were as a result of its majority Vietnamese ownership. “What is important is that the traffic rights and the benefits of the operations flow to Jetstar Pacific which is over 70% owned by Vietnamese interests, and not Jetstar.”
“Jetstar Pacific is a really Vietnamese business,” Buchanan said. He added that Qantas now had a minority shareholding of an existing 27% in Jetstar Pacific and had the option to increase its share to 30% next year.