Qantas puts Asia expansion plans on hold

Qantas Airways Chief Executive Officer Alan Joyce said plans to set up a full-service carrier in Asia have been put back by "a year or two or three" after the carrier failed to secure a deal to build a hub there. "We are still in dialogue with both the Singaporeans and Malaysians but nothing is happening in the short term," Joyce said in a Berlin interview. "It's more of a long-term issue." Qantas announced plans for a base in Malaysia or Singapore in August so it could hire workers at a lower cost and offer a greater choice of connecting flights in the fastest growing aviation market and stem international losses. Talks with Malaysian Airline System collapsed after the companies couldn't agree on the commercial terms, the Sydney-based carrier said in a statement on March 9. "While we understand the attraction of Malaysia, given the capital light solution it offered, we believe a delay of the introduction of the premium carrier could be a better outcome," Anthony Moulder, an analyst at Credit Suisse Group AG, said in a March 9 report. Qantas rose 1.4 per cent to A$1.78 at the close of trading in Sydney yesterday. The stock has gained 22 per cent this year compared with a 4.9 per cent rise in the benchmark S&P/ASX 200 index. The Asian project failed because the requisite traffic rights couldn't be secured in Singapore, while Malaysian Air is going through a restructuring plan of its own, so that reaching an accord with Qantas proved too "complex", Joyce said Tuesday night in Germany, where Air Berlin joined the Oneworld alliance of airlines. The Asian carrier would have lost money in the first few years of its operation, and the plan was aimed more at recovering market share rather than delivering on current earnings targets, Joyce said. From gulfnews