Qantas eyes Singapore for premium airline: Report

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Australian flag carrier Qantas is still considering Singapore as the base for a premium carrier in Asia, chief executive Alan Joyce said in a report published Monday.

Qantas' Asian plans, which it sees as key to its strategy of revitalising its loss-making international business, were dealt a blow when talks with Malaysian Airlines over the premium joint-venture collapsed last month.

Talks with Singapore on the issue had also lapsed but Joyce told The Australian newspaper that the airline was still looking at a range of options for a premium Asian airline, including the city state.

"This will take a bit longer than we originally thought, but we're still keen to set up a premium airline in Asia and we're still looking at a range of options available to us -- and Singapore is one of them," Joyce said.

He added that Qantas was still talking to the Singapore government on the idea.

"We work with them on a range of issues and one of them is keeping the door open to the possibility of a premium airline," Joyce told the newspaper.

Qantas holds a 65 per cent share of the domestic Australian market but has struggled with an underperforming international business.

It is attempting to refocus on Asia, the world's fast-growing aviation market, and last month announced a new Hong Kong-based budget airline, Jetstar Hong Kong, which it hopes will be in the air in 2013.

But Joyce said that for long-term success Qantas, which has a weak market share in Asia, needed to participate in the premium end of the regional market.

"Qantas could probably live with it for the next few years but I'm committed to (the idea) that in the future we have to address it, and the way to address it is to be involved in a premium airline in Asia," he said.

Joyce said while there would be costs associated with establishing a new Asian operation, it was needed to fix the longer-term problem of Qantas being relevant in the region.

"It's something we have to do in the long-term but we don't have to do immediately," he said.

Qantas's Asia plans sparked a fierce domestic backlash when unveiled last year, with Australian unions concerned the move would see jobs sent abroad.

The ensuing acrimony between management and unions saw Joyce ground the entire Qantas fleet in October, stranding thousands of passengers at airports around the world, digging into the airline's bottom line.