Qantas airline in doubt as Malaysia talks fail

Australian carrier Qantas's plans to create a premium Asian airline were thrown into disarray Friday after it announced talks with Malaysia Airlines had collapsed. While Asia remained a priority for Qantas and it wanted to expand in the region, given global economic uncertainty the group "will allocate minimal capital to such ventures". "Last year, Qantas announced a five-year plan to address the challenges facing the international business," chief executive Alan Joyce said in a statement announcing the talks had failed. "The transformation of Qantas's international business remains vital, with plans to return the international business to profitability in the short-term on track." Qantas revealed plans to establish a joint-venture premium airline in Asia last August as it repositions itself within the industry's fastest-growing region and seeks to turn around its loss-making international arm. Singapore and Malaysia were seen as the likely bases and it is understood that Qantas had been favouring Kuala Lumpur given it would involve lower costs. But Qantas said Friday that talks with Malaysia Airlines on a partnership, including the establishment of a new premium airline, "would not continue due to parties being unable to reach mutually agreeable commercial terms". Qantas's plans to establish a premium Asian airline sparked a fierce backlash against the carrier from unions concerned at the outsourcing of jobs, culminating in the airline grounding its entire fleet last October.