Qantas appears to have grounded its proposed Asian-based premium airline even before it launched.
Qantas CEO Alan Joyce has cancelled plans to establish the new premium airline, which was tipped to be branded Red Q or OneAsia (although wags were quick to christen it 'Qantasia'), as a joint venture with Malaysia Airlines.
In a statement, the airline said that "discussions with Malaysia Airlines on a partnership including the establishment of a premium airline would not continue due to the parties being unable to reach mutually agreeable commercial terms."
The statement also cited "global economic uncertainty" as a reason for caution.
And while leaving the door open to other joint ventures and alliances in the Asian region, Qantas "will allocate minimal capital to such ventures".
In Qantas' half-yearly report in February this year, Alan Joyce made clear his desire to rely on "a capital-lite model for any premium airline investment in Asia."
Joyce had previously promised the new airline would "offer same-day services to and within Asia, and overall frequencies from Australia to Asia will grow. For the first time in our history, Qantas intends to fully participate in the benefits of an Asian hub."
Qantas was also splashing out on new fuel-efficient Airbus A320 aircraft for the premium airline, in which it was to hold a 49% stake alongside yet-to-be-named partners.
With Red Q now on the ice, Qantas will likely accelerate its alliance with Malaysia Airlines which would encompass code-sharing of flights as well as frequent flyer point sharing and reciprocal lounge access.
MAS is expected to join the oneworld airline alliance in late 2012, however, speaking with Australian Business Traveller earlier this year, Qantas' Head of Airline Loyalty Stephanie Tully said "we will aim to do the frequent flyer agreement earlier".
Coincidentally, Malaysia Airlines overnight confirmed plans to launch an Airbus A380 service between Sydney and Kuala Lumpur later this year.