Talks between Qantas and Malaysia Airlines on setting up a new premium carrier has ended, the Australian carrier said in a statement to the Sydney Stock Exchange.
Qantas said the two carriers were unable to reach "mutually agreeable commercial terms." Qantas CEO Alan Joyce said "Asia remained a priority for the Qantas Group and it continued to explore opportunities in the region, including joint ventures and alliances. However, mindful of global economic uncertainty, and consistent with the Qantas focus on disciplined financial management, the group will allocate minimal capital to such ventures."
Qantas had previously said it was looking at both Kuala Lumpur and Singapore for a premium carrier joint venture - with labour unions making plain their opposition to the idea.
Joyce added, "the transformation of the Qantas international business remains vital, with plans to return the international business to profitability in the short term on track. In the medium term, the Qantas flying businesses, both domestic and international combined, will exceed the cost of capital on a sustainable basis."
Moshin Aziz, analyst at Maybank, said: "Trying to make two airlines with long history - with each sets of legacy issues - to work together is an over-optimistic idea. They are likely to get more success trying to get Kevin Rudd and Julia Gillard to work together as a team."