Malaysia Airlines, like Qantas, drops plans for premium airline

Malaysia Airlines has followed Qantas in shelving plans for a premium airline.

MAS intended its offshoot to focus on destinations within four hours of Kuala Lumpur and primarily target the business travel market rather than the low-cost leisure sector.

However, the airline has now spiked the notion of launching a regional premium airline.

"Strategy and objective of the short-haul operations will remain unchanged but there will be no new airline" MAS short haul chief operating officer Ignatius Ong revealed today. "The operations will come under the banner of Malaysia Airlines."

MAS Chief Executive Officer Ahmad Jauhari Yahya announced the airline late last year and promised it would launch by mid-2012.

Last month saw Qantas axe its own plans for an Asian-based premium airline established in partnership with MAS, saying that "discussions with Malaysia Airlines on a partnership including the establishment of a premium airline would not continue due to the parties being unable to reach mutually agreeable commercial terms."

The airline's statement also cited "global economic uncertainty" as a reason for caution.

However, Qantas CEO Alan Joyce isn't giving up, and has since said that “we’ll eventually do it but the time wasn’t right.”

Qantas is "still in dialogue with both the Singaporeans and Malaysians but nothing is happening in the short term" Joyce told BusinessWeek. "It’s more of a long-term issue.”