March 20 2012  |  Airlines & Airports

Qantas-Malaysia plan for premium airline falls apart

By P.Convery

Qantas may have difficulty finding a partner to start a new airline following the collapse of its talks with Malaysia Airlines

Qantas and Malaysia Airlines have to strike a deal to set up a new premium airline in Southeast Asia.

Qantas announced on 9 March that it had been unable to reach mutually agreeable commercial terms” with Malaysia's flag-carrier, and that it will start examining other options to start a new airline.

Qantas Chief Executive Alan Joyce emphasized that a new Asian airline is a key part of Qantas's plan to reverse its international losses.

"The transformation of Qantas’s international business remains vital, with plans to return the international business to profitability in the short-term on track," he said.

Qantas first announced its plan for a premium airline in August 2011, favoring Malaysia as a base rather than Singapore, thanks to lower operating costs and the fact that Malaysia Airlines will soon join Qantas in the Oneworld alliance.

The Australian carrier's inability to agree terms with Malaysia Airlines may well leave it without a partner for a start-up airline, as Singapore Airlines is in partnership with Qantas rival Virgin Australia, and there has been no talk of any discussions between Qantas and Garuda Indonesia.

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