Qantas’ plans to establish a premium airline as part of its international strategy have hit a major bump in the road with an official announcement confirming the end of discussions with Malaysia Airlines. “… discussions 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,” said the official statement.
CEO Alan Joyce said that Asia remained a priority for the Qantas Group and it continued to explore opportunities in the region including joint ventures and alliances, but stopped short of naming any particular airline.
He added, “However mindful of global economic uncertainty, and consistent with Qantas’ focus on disciplined financial management, the group will allocate minimal capital to such ventures.” It is probably safe to assume that this unwillingness to invest beyond the minimum was a key reason behind the two airlines being unable to reach an agreement.
Transport analyst, Matt Crowe, was quoted in a Sydney Morning Herald report as saying, “This deal with an Asian carrier has already taken longer than we thought it would, and now it's almost back to square one. I don't think that there are that many alternative options [to Malaysia Airlines].''
Both airlines respectively announced plans last year to start a regional premium carrier (see story here), and on January 27, Dow Jones Newswires revealed that the two were in discussion about a possible joint venture.
Vicki Williams
