Qantas Group and Vietnam Airlines (VN, Hanoi Noi Bai International) have agreed to restructure loss-making Jetstar Pacific (Ho Chi Minh City) which, once completed, will see the Vietnamese low-cost carrier revert to its previous name and branding of Pacific Airlines (1990) while seeking closer commercial ties with its Vietnamese parent.

Although Qantas and Vietnam Airlines have only conceded that they will "continue to review the low-cost carrier’s structure and future shareholding arrangements", the discontinuation of the Jetstar Pacific brand has only reinforced existing speculation that Qantas Group's exit from the LCC's shareholding is now imminent given several years of protracted deep losses. Current Vietnamese records show the LCC is majority-owned by Vietnam Airlines with a 68.85% stake while Qantas Group holds its 30% stake via its Singapore-based Qantas Asia Investment Company vehicle. The remaining 1.15% is held by the Saigon Tourist Holding Company and former airline CEO Luong Hoai Nam.

"Low-cost carriers will play a certain role in supporting the return of travel as restrictions ease, and by streamlining functions, Pacific Airlines can remain competitive, inherit many of the efficiencies of Vietnam Airlines and continue to offer the low fares our customers expect," Vietnam Airlines Executive Vice President and Pacific Airlines Chairman Trinh Hong Quang said in a statement.

The Vietnamese flag carrier said it will continue to operate a dual-brand strategy. However, in order to tighten its commercial and marketing alignment with Vietnam Airlines, Pacific Airlines will switch its reservation system from Amadeus IT Group Navitaire to Sabre Airline Solutions. It will also adopt a new logo and livery, both inspired by its majority shareholder's brand identity.

Jetstar Pacific, which has been a part of Qantas's Jetstar Group since 2007, currently operates fifteen A320-200s.

It is recalled that last month, Vietnam's auditor general placed Jetstar Pacific under special financial supervision but did not elaborate on what those measures entailed. At the time, it described as the LCC as one of several state-owned enterprises whose financial situation was tenuous and whose use of state investment resources was "inadequate".

For its part, Qantas Group reiterated its commitment to its other foreign JVs (Jetstar Asia Airways (3K, Singapore Changi), Jetstar Japan (GK, Tokyo Narita), and Jetconnect (Auckland International)) stating that they remain core assets.