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Are reports claming that Qantas will shelve plans for Asian premium carrier credible?

Reports have emerged from Reuters and Plane Talking that Qantas has shelved plans for its Asia-based premium carrier which has been called by the media at various times Red Q, One Asia, or Red One. The venture would apparently be replaced by a joint venture agreement with future oneworld alliance partner Malaysia Airlines in Asia. Earlier this year, Qantas had announced plans to launch a full service carrier based in Asia (likely Singapore) with Airbus A320 family aircraft featuring lie-flat seats in business class.

Meanwhile, Qantas CEO Alan Joyce has denied these reports, stating in an interview with the Sydney Morning Herald:


“Nothing has changed in relation to our plans. We still believe we have to have an Asian alternative for our core customer base, “We are still looking at setting up a premium airline in Asia. We are still talking to the Singaporeans and the Malaysians and when we have a more definitive decision about what we are going to do … and who the partners are … we will inform the market.”

Unions predictably reacted to the report with what qualifies as joy for PR spokespeople; Richard Woodward, vice-president of the Australian and International Pilots Association, stated “We’ve said for months that this whole plan was incredibly risky and wholly unnecessary. Qantas management had little to gain and everything to lose from pursuing a race to the bottom in South-east Asia,”

Market dynamics in Asia, which has seen heavy growth in traffic for low cost carriers (LCC), would indicate that Qantas’ plan is flawed, as we opined back in August. Furthermore, competition with Asian full service carriers such as Cathay Pacific and Singapore Airlines would be tough given their superior service reputation and lower operating costs.

Still, it will be interesting to see whether these reports are actually true; Qantas management seems to have its heart set on an Asian premium carrier as the cure to its international woes.

About Vinay Bhaskara

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