Blow for Qantas as talks with Malaysian Airlines end

Qantas Airways has called off talks with Malaysian Airlines to set up an Asian premium carrier because deal terms could not be agreed, a big setback to the Australian airline's plans to turn around its ailing international operations. The announcement sent Qantas shares down as much as 4.3 percent to a two-week low.
Qantas had said it was in talks with Malaysian Airlines, budget carrier Air Asia and Singapore to set up the carrier with one of them, but recent reports indicated talks had run into rough weather over capital investment and size of stakes. "It is quite disappointing. Malaysian was the best chance for a tie-up. This will delay the recovery," said David Liu, head of research at fund manager ATI Asset Management, which owns Qantas shares. Liu said he was still positive on the shares.
"The options left for them are revisiting the option of Singapore as an Asian hub, better fleet use and leaning more on JetStar International," he said referring to Qantas' low-cost airline. Qantas chief Executive Alan Joyce, who was named the nation's most influential business leader in 2011 by the Australian newspaper, had staked almost everything on tapping Asia's low costs to turn around the international operations. Qantas said it "continued to explore opportunities in the region, including joint ventures and alliances.