Paul Phelan/CAIRNS

Australian airline entrepreneur Bryan Grey hopes to secure a partner soon to help fund his proposed start-up airline Aussie Air, with Malaysia Airlines (MAS)tipped as a likely contender.

Grey, who was founder of Compass Airlines which went into liquidation in 1991, has told a meeting of fund managers in Sydney that he is close to securing funding through "an international partner". Sources in Malaysia indicate that MAS is now "considering" an approach from Grey.

A link with Grey's start-up would provide MAS with access to an alternative domestic network in Australia to that provided by its partner Ansett, which is now locked into its own three-way alliance with rival Singapore Airlines and Air New Zealand.

Grey says that he is looking to lease up to ten Airbus A300B4s for the service, plus a spare reserve aircraft, initially serving eight Australian cities. His aim is to win a 14-15%share of the Australian domestic market.

Procurement of the aircraft has been on hold during Grey's long-running legal battle with Qantas Airways. The action centred over Aussie Air's claim to the status of a "new entrant" which would oblige Qantas to negotiate over the provision of terminal access for its would-be domestic rival. Grey expects to be in a position to start services as soon as March 1998, having won a ruling in his favour.

MAS is also believed to be a possible equity partner in Papua New Guinea's (PNG) debt-burdened national carrier, Air Niugini. One industry report suggests that a PNG cabinet minister is now in Kuala Lumpur negotiating the sale of 51% of Air Niugini to MAS. Another report places a minister in Taipei, in Taiwan, discussing a similar deal with a subsidiary of Taiwanese carrier Eva Air.

Source: Flight International