Qantas delays premium carrier plans indefinitely

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Qantas Airways has not abandoned its hopes of setting up a premium carrier based in Asia, but it has decided to postpone those plans by a few years after failing to find the right partner.

The Oneworld alliance member had been eying both Singapore and Malaysia as the base for the new carrier, and entered into advanced talks with Malaysia Airlines on a possible joint venture. But the airline said in March that those talks fell through as the two carriers were "unable to reach mutually agreeable commercial terms".

"The premium airline is still an opportunity," says Qantas chief executive Alan Joyce in an interview with Flightglobal Pro. "We will only do it with the right partner with the right traffic rights and with the right location. We still continue to talk to multiple parties. But I don't think this will happen for some time now."

Joyce says that if the plan goes ahead, Singapore and Malaysia will remain the airline's preferred potential bases. "We are not ruling any other cities out, but those are our focus," he adds.

The Airbus A320 aircraft that were originally meant for the premium carrier will now go to Jetstar Hong Kong, the new joint venture between Qantas and China Eastern airlines, says Joyce. "We will not have any surplus aircraft this year and next," he adds.

Failing to set up the premium carrier is not a big blow to Qantas's plans to revamp its loss-making international business, says Joyce.

The carrier plans to streamline its engineering and catering units, investing in new fuel-efficient aircraft, refurbishing existing ones such as its Boeing 747-400s, working closely with foreign partner carriers and revamping its route network. All of this will help the international business break even within the next three years, says Joyce.