Qantas Airways' low-cost offshoot Jetstar Pacific will be majority owned by Vietnam Airways under an ownership change confirmed in Hanoi late yesterday.
Under the new arrangement, national flag carrier Vietnam Airways will hold 69.93 per cent of Jetstar Pacific, with Qantas Group owning 30 per cent of the low-cost carrier.
The ownership restructure had been heavily flagged in Vietnamese media reports.
Previously, Vietnam's State Capital Investment Corporation (SDIC) held the majority stake in Jetstar Pacific.
A new chief executive and chairman would also be appointed in coming weeks.
A joint statement from Vietnam Airlines and Jetstar said the two carriers would work together to develop a two-brand strategy focused on serving domestic and international routes.
Jetstar Group chief executive Bruce Buchanan said he welcomed Vietnam Airlines as a new partner in Jetstar Pacific.
"We are confident this partnership between a low-fares carrier and a full-service airline can replicate the success of the two brand strategy used by Qantas and Jetstar in Australia,'' Mr Buchanan said in the statement on Wednesday.
Jetstar Pacific would also receive a capital injection of $A25 million for fleet renewal, with the five Boeing 737s used currently to be replaced with new Airbus A320s from the middle of 2012.
The airline said it hoped to have 15 A320s in its fleet within the next few years.
Qantas said, in a statement, its contribution to the capital injection would be $A7.5 million.
"The shareholders support Jetstar Pacific's fleet to grow to 15 A320s within the next few years,'' the airline said.
Qantas has faced a number of challenges since it bought into Jetstar Pacific, then known as Pacific Airlines, in 2007.
In 2010, two Qantas executives were detained by Vietnamese authorities for more than six months as part of an investigation into fuel-hedging losses at Jetstar Pacific.
The investigation was terminated and the pair was not charged.
A former Jetstar Pacific chief executive was also arrested for "causing serious losses'', while a Civil Aviation Authority of Vietnam report found the airline failed to follow maintenance regulations.