On April 26, Qantas signed an investment agreement with the State Capital Investment Corporation (SCIC), the investment holding arm of the Vietnamese Government, to purchase a 30 per cent stake in Pacific Airlines, Vietnam's second largest carrier.

The Chief Financial Officer of Qantas, Mr Peter Gregg, said Qantas would partner with SCIC to manage this investment, with completion expected within the next few months.

"This will be an important investment for the Qantas Group, supporting Jetstar's growth strategy and enabling us to extend our reach in South East Asia, where we have been actively exploring opportunities," Mr Gregg said.

"Vietnam offers great growth potential for aviation. It has a large and growing domestic market and is increasingly popular as a tourist destination."

Dr Le Thi Bang Tam, SCIC's Chairwoman, said SCIC chose Qantas as the strategic partner for Pacific Airlines because Qantas was one of the best airlines in the world. In particular, Qantas had developed Jetstar into one of the most successful low-cost carriers in Asia, she said.

Mr Gregg said the Qantas Group would work with Pacific Airlines and SCIC to develop a new business plan for the carrier, which currently operated a fleet of single-class B737-400 aircraft on domestic routes in Vietnam and international services between Vietnam and Taiwan.

"Pacific Airlines' strategy is to reposition itself as a low cost carrier and expand its operation both within Vietnam and internationally. The Qantas Group is uniquely placed to help implement this approach.

"We are currently working closely with the management of Pacific Airlines to harmonise its operations with Jetstar and explore opportunities for further growth.

"We will be actively involved in the ongoing management of the company through Board representation and key management appointments," he said.

Mr Gregg said the investment was a natural development for Jetstar, which already had a strong presence in South East Asia through its investment in Jetstar Asia and its own international services between Australia and a range of destinations in the region - including Vietnam.