Qantas has failed to strike a deal with Malaysia Airlines (MAS) in its bid to set up a new premium airline in Southeast Asia.
The company announced on Friday that it had been unable to reach “mutually agreeable commercial terms” with the KL-based national carrier, and would start looking elsewhere.
Qantas Group CEO Alan Joyce reiterated that the new Asian airline remained a key part of the airline’s strategy to stem international losses. “The transformation of Qantas’ international business remains vital, with plans to return the international business to profitability in the short-term on track,” he said in a statement.
Announced in August 2011, Qantas’ controversial international strategy outlined plans to set up a new Asia-based premium carrier, which may be known as ‘RedQ’. Malaysia was considered the favoured base for the carrier, rather than Singapore, due to lower operating costs and the fact that MAS will soon join Qantas in the oneworld alliance.
The recent announcement by MAS that it was planning to launch a new “regional premium airline to connect Malaysia to ASEAN destinations and key cities in South Asia and Greater China” mirrored the RedQ plan and appeared to confirm a potential tie-up with the Australian carrier.
Failure to agree terms with MAS however, leaves Qantas in limbo. Singapore Airlines is already in partnership with its rival Virgin Australia, so any tie-up with the Changi-based carrier appears unlikely. Jakarta is another potential base for the Asian airline, although there has been no talk of any discussions with Garuda Indonesia.
Since it was first announced last year, Qantas’ international strategy has met with fierce opposition from unions, which accused the airline of off-shoring Australian jobs.
