Qantas Airways has ceased its discussions with Malaysia Airlines (MAS) to set up a new premium carrier.
In a stock exchange filing, the carrier said this was because both
parties were "unable to reach mutually agreeable commercial terms". Asia, being the world's fastest growing region, will remain a
priority for the Australian carrier. Qantas will continue to explore opportunities in the region, including through joint ventures and
alliances, its chief executive Alan Joyce says.
"However, mindful of global economic uncertainty, and consistent with
Qantas' focus on disciplined financial management, the group will
allocate minimal capital to such ventures," Joyce says. "The transformation of Qantas' international business remains vital,
with plans to return the international business to profitability in the
short term on track. In the medium term, the Qantas flying businesses,
both domestic and international combined, will exceed the cost of
capital on a sustainable basis," Joyce adds.
Last year, Qantas announced a five-year plan to tackle challenges in
its international business, part of which was the setting up of the
premium carrier.Other strategies include restructuring the international network to
create a "sustainable business model", improving customer experience and
to focus more on Asia because of strong growth in the region. The carrier previously said it wanted to establish a hub in Singapore
and Malaysia, and was in talks with key stakeholders in both markets.
With this setback, it unclear whether talks with Singapore remain
ongoing.
Qantas posted a 52% decline in its profits in the first half of
financial year of 2011/12 to Australian dollars (A$)202 million ($215
million), while MAS incurred a net loss of M$2.5 billion last year.
Flight Global
