Jetstar mulling franchise option for ASEAN open skies: report

SYDNEY (AFP) - Australia's Jetstar will consider adopting a franchise system to expand in Southeast Asia if ASEAN adopts an "open skies" policy next year, it was reported Tuesday.

The Australian Financial Review said flights within the 10-member Association of Southeast Asian Nations (ASEAN) were due to be deregulated next year, opening up one of the world's fastest growing aviation markets.

But it said wholly-owned Jetstar subsidiaries could not benefit from the agreement as they would be regarded as foreign owned, forcing Qantas's discount offshoot to instead examine a franchise system.

Jetstar chief executive Alan Joyce told the newspaper that the airline would consider taking minority stakes in airlines throughout the region as a means of expanding its brand.

Joyce compared Jetstar's growth potential in Asia to that of Southwest Airlines in the United States and Ryanair in Europe before trade liberalisation in their respective markets.

"Before that, no one had even heard of them," he said.

The Financial Review said Qantas was looking to invest in carriers in the Philippines, Indonesia and Thailand.

It said carriers minority owned by Jetstar would carry the airline's logo and use its ticketing and distribution systems, as well as possibly gaining access to its loyalty scheme.

The newspaper said Qantas would also use second teams of pilots and engineers to lift the carriers' standards and offer Qantas-accredited training schemes.

Qantas already owns a 49 percent state in Singapore-based Jetstar Asia, which flies under the Jetstar banner.

It also confirmed in April that it was taking a 30 percent stake in Vietnam's Pacific Airlines.