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TODAYonline | Business | Qantas plans for Asian hub put on hold
Qantas plans for Asian hub put on hold
Updated 08:36 AM Mar 21, 2012
BERLIN - Qantas Airways chief executive 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," Mr Joyce said in Berlin. "It's more of a long-term issue."
Qantas said in August it planned to build a base in Malaysia or Singapore in order to hire workers at a lower cost and offer a greater choice of connecting flights in the fastest growing aviation market. Talks with Malaysian Airlines collapsed after the companies could not agree commercial terms, Qantas said in a statement on March 9.
The project failed because the requisite traffic rights could not 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", Mr Joyce said last night in Germany, where Air Berlin joined the Oneworld alliance.
"We both agreed mutually that we would delay it for a while and then start the dialogue again in the future," he said.
The Asian carrier would have lost money in the first few years of operation, and was aimed more at recovering market share than delivering on current earnings targets, Mr Joyce said.
"We'll eventually do it but the time wasn't right today," he said. Qantas and Malaysian are both Oneworld members.
While Qantas has about 65 per cent of Australia's domestic air market, less than 20 per cent of international passengers choose to fly on its planes after customers switched to rivals such as Singapore Airlines and Dubai-based Emirates. BLOOMBERG
Is it a year, two years or three years?