By James Wilkinson

The Qantas Group’s low-cost offshoot Jetstar and Air Asia have announced a strategic partnership that will see savings for both companies run into the hundreds of millions – to the benefit of travelers in the Asia-Pacific region.

Announced in Sydney yesterday (Jan 7) jointly by Qantas Group CEO Alan Joyce, Jetstar CEO Bruce Buchanan and Air Asia Group CEO Tony Fernandes, the partnership is a world-first for low cost carriers and is expected to see airfares drop to the lowest levels ever.

Speaking exclusively to SpiceNews, Fernandes said the partnership shows “low cost carriers can work together” and the whole idea behind the agreement is to reduce costs and lower airfare prices, to the benefit of all market segments, including MICE.

Fernandes also said Air Asia was looking at expanding its Australian operations beyond the Gold Coast, Melbourne and Perth to include Sydney (by mid-2010), along with potentially Adelaide, Broome and Darwin.

Click on the image above to watch the exclusive interview with Fernandes.