Qantas picks up stake in Vietnam's Pacific Airlines

Sydney: Australian flag-carrier Qantas has decided to pick up a 30 per cent stake in Vietnam's Pacific Airlines as part of its expansion into the Asian market. According to The Australian Financial Review, the deal is worth about A$50 million (US$41.5 million).

The report also said that the Qantas board gave the green light for the purchase last week. Under Vietnam's current foreign investment laws, a 30 per cent stake is the maximum that Qantas, or any other airline, can pick up.

Industry sources say that the move by Qantas is part of the airline's strategy to take on low-cost carriers such as Air Asia and Tiger Airways in the world's fastest growing aviation market.

Qantas had confirmed this year January that it was engaged in talks on buying a stake in the Ho Chi Minh City-based Pacific Airlines. According to The Australian Financial Review, the private consortium currently bidding to take over Qantas had also approved the deal.

Vietnamese government's State Capital Investment Corporation (SCIC) is Pacific Airlines controlling shareholder, with Saigon Tourist Corporation also holding a stake, according to the airline's website.