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A merger between AirAsia and the budget carrier of Australia's Qantas Airways Ltd may be in the offing.

Published: 23 Dec 2008

A merger between AirAsia and the budget carrier of Australia's Qantas Airways Ltd may be in the offing.

A report in Malaysia's The Star newspaper, citing an unnamed source, said Jetstar and AirAsia were in merger talks, possibly involving a share swap, to cope with the slowing worldwide demand for air travel.

The report indicated that the talks are still in preliminary stages and it is learnt that AirAsia's boss Datuk Seri Tony Fernandes and Qantas new chief executive officer Alan Joyce have been mulling over it.

Fernandes told StarBiz that "we are always talking and looking at ways to strengthen AirAsia into a global brand. If there are opportunities of equals which will enhance the brand, then it is something worth considering."

Qantas declined to comment on reports.

Jetstar's Australian operation is wholly owned by Qantas but is managed separately and operates independently. Jetstar's intra-Asian operation – JetstarAsia – is a Singapore-based partnership between Qantas (49 percent), local businessmen Tony Chew (22 percent) and FF Wong (10 percent), and Temasek Holdings (19 percent).