New reports are coming in that suggest that Air Asia and Qantas’ low cost subsidiary, Jetstar, have announced an alliance aimed at reducing costs, pooling expertise and driving down their fares. The two carriers have agreed to a cost sharing alliance. This alliance will have initiatives including co operation in the provision of passengers and ground handling at overlapping airport with Australia and Asia.

It will also include the pooling of aircraft components and spare parts and reciprocal arrangements for passenger disruption management. This new agreement also proposes joint specification for the carriers’ next generation of narrow bodied aircrafts. It will also consider the further possibility of joint procurement of these aircrafts. Both Jetstar and Air Asia currently predominantly use A320-200s for their short haul routes.

The rumors have persisted over the last twelve months or so. The possibility of a merger between the two carriers seems to be growing. Despite all of these rumors, the alliance does not go as far as to create code sharing agreements between the two carriers if they choose to announce this tie up.

Lately a lot of airlines have been banding together in order to beat out the ongoing recession. The truth of the matter is that the recession has been going on for so long, that many airlines do not have pockets deep enough to make it on their own. Thus, they have to come up with new ways to make what funds they do have last until the recession gets better. Most are finding out that the best way to do that is to join up with other airlines.