Alan Joyce not giving up on Qantas' premium Asian-based airline

Qantas CEO Alan Joyce isn't giving up on his ambitious and controversial plan for a premium Asian-based airline, with failed discussions with prospective partner Malaysia Airlines seen as more of a delay than a coup de grâce.

In March Joyce shelved his scheme to establish a new 'full service' airline, which was tipped to be branded Red Q or OneAsia (although wags were quick to christen it 'Qantasia'), as a joint venture with MAS. Joyce said the airlines were "unable to reach mutually agreeable commercial terms" and also citing "global economic uncertainty" as a reason for caution.

Red Q may live to fly another day...
Mockup by Australian Aviation

However, the exec's enthusiasm for the plan seems unabated.

Speaking with The Australian this week, Joyce said Singapore remained an option in the airline's plan to establish a premium carrier in Asia.

"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.

"We work with (the Singapore government) on a range of issues and one of them is keeping the door open to the possibility of a premium airline."

Last month Joyce told BusinessWeek that while his plans have been put back by “a year or two, or three”, Qantas is "still in dialogue with both the Singaporeans and Malaysians but nothing is happening in the short term. It’s more of a long-term issue.”

“We’ll eventually do it but the time wasn’t right,” Joyce said. "We do believe that for the long-term success of Qantas it needs to participate in the premium end of the market."

BusinessWeek also reported Joyce as saying 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.

"The premium airline probably would have made it harder because it would have lost money in the first few years -- but it's to fix the longer-term problem of Qantas being relevant in Asia, related to the premium traffic," Joyce said. "It's something we have to do in the long term but we don't have to do immediately."

David Flynn

David Flynn is the Editor-in-Chief of Executive Traveller and a bit of a travel tragic with a weakness for good coffee, shopping and lychee martinis.