Qantas’ Asian operations may relocate to Malaysia

Australian airline Qantas should base its Asian operations in Malaysia rather than Singapore if it is serious about expanding in the region, AirAsia chief Tony Fernandes said yesterday.

The Australian carrier wants to have, within five yars, a hub in Asia feeding traffic into Qantas and budget offshoot Jetstar’s networks

Mr Fernandes told The Australian Financial Review that a Qantas operation based in Kuala Lumpur would be the stronger option.

“Singapore is the better business hub for sure, but the majority of Singapore traffic is transit traffic – just like Dubai,” he said.

“Whether you connect in KL or Singapore, the key is connectivity.”

Qantas in August announced plans to establish a joint-venture premium airline in Asia as it repositions itself within the industry’s fastest-growing region and seeks to turn around its loss-making international arm.

Talks were reported to be on the backburner given uncertainty over global economic conditions and volatile fuel prices, but Qantas said on Monday they were ongoing, with Kuala Lumpur and Singapore the most likely potential bases.

Mr Fernandes, who over the past decade has revived Malaysia-based AirAsia to turn it into Asia’s biggest budget carrier, said Qantas would have lower costs if it chose Kuala Lumpur.

“The main thing is cost saving, avoiding wasteful competition,” he said.

Qantas chief executive Alan Joyce wants the Australian carrier to have, within five years, a hub in Asia feeding traffic into Qantas and budget offshoot Jetstar’s networks.