Qantas and Malaysia Airlines talk partnership

Malaysia Airlines said on Tuesday it has begun talks with various carriers, including Australia's Qantas, to form tie-ups including joint ventures as carriers face a tough economic environment.

The airline's managing director and CEO Idris Jala had previously denied reports that Malaysian and Australian carriers were in merger talks.

Jala made the latest comments after Deputy Prime Minister Najib Razak reportedly said the government was open to a tie-up involving Malaysia Airlines. The government owns more that 90 percent of the national carrier.

"The present conditions in the world dictate to us to be creative and innovative provided we can agree on the participation of foreigners on a win-win basis," Najib was quoted as saying by the Malaysian Reserve newspaper.

Jala said that while Malaysia Airlines would pursue strategic partnerships, the government would have the final say in the decision to go ahead with a tie-up.

"Any partnership that we pursue will require engagement with, and approval by, key stakeholders," he said.

"Malaysia Airlines is very pleased with the continued strong support from the government. We will do everything possible to fulfill the interests of the airline in line with the aspirations of the nation."

Jala said that "more details will be announced as and when we have finalised the terms of any of these partnerships. At this stage, we have no further comment."

Malaysia Airlines has undergone a sweeping turnaround programme, including staff layoffs and route closures, which ended a series of disastrous losses and produced a record profit in 2007.