Qantas insists it is pushing ahead with plans to set up an ultra-premium airline in south-east Asia despite speculation that it is about to shelve the proposal because of the precarious state of the global economy.
The airline's chief executive, Alan Joyce, today said the company is still working towards establishing a premium airline in the Malaysian capital, Kuala Lumpur, or Singapore next year.
"Nothing has changed in relation to our plans. We still believe we have to have an Asian alternative for our core customer base," he told BusinessDay. "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."
However, he admitted that Qantas "always maintains flexibility" with its planning.
Mr Joyce was responding to speculation that Qantas was about to walk away from plans to set up a premium airline - most likely to be called RedQ or OneAsia - in south-east Asia.
The plans have been a key plank of Qantas's strategy to turn around its under-performing international operations, which lost more than $200 million last financial year.
Earlier, the long-haul pilots' union had welcomed the speculation that Qantas had jettisoned the plans.
"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," Richard Woodward, the vice-president of the Australian and International Pilots Association, said.
Mr Joyces' comments came after the airline revealed that its first-half earnings will be hit by industrial action and a rising fuel bill.