QANTAS AIRWAYS’S plans to set up a full-service carrier in Asia to reverse losses on international routes have been set back after talks with Malaysian Airline System Bhd collapsed.
The companies couldn’t agree on commercial terms, the Sydney-based airline, Australia’s largest, said yesterday.
Qantas shares fell the most in almost four months and the company said it will examine other opportunities for a venture in Asia involving “minimal capital”. It unveiled plans for the new airline in August as part of its strategy to turn around A$200 million of international losses. Chief executive Alan Joyce wanted access to a hub in Malaysia or Singapore so he could hire workers at a lower cost and offer a greater choice of connecting flights in Asia.
His plans included a revamped network and new carrier in Japan through the Jetstar budget unit.
“They have to look at joint ventures for their existing business, but there’s very few partners in Asia that can bring much benefit to Qantas,” said Neil Hansford, chairman of Strategic Aviation Solutions, a Port Stephens, Australia-based adviser to airlines. – (Bloomberg)
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