Qantas bales out of regional group

The Age

Wednesday January 6, 2010

By MATT O'SULLIVAN

QANTAS has quietly ended its 40-year membership of a key Asia-Pacific region airline group, stunning officials who see it as crucial to Qantas' long-term growth prospects in the region.The 17-member Association of Asia Pacific Airlines, which includes Singapore Airlines and Cathay Pacific, has often been the breeding ground for alliances.Qantas said it had cancelled its membership because it preferred to build relationships directly with other airlines rather than through AAPA.Qantas chief Alan Joyce will today announce details of a tie-up between its low-cost offshoot, Jetstar, and Malaysian airline AirAsia aimed at cutting costs.But some insiders believe the arrival of AirAsia's chief, Tony Fernandes, in Sydney today for the news conference is more about putting pressure on Tiger Airways' public float.Qantas government affairs chief David Epstein said it had dropped out of AAPA because the airline's interests extended beyond those focused on by the association."It is now more appropriate for the group to manage more stakeholder relationships in the region directly or in tandem with regional airline partners," he said.The decision has astonished industry insiders, who say AAPA has been particularly important to Qantas and Jetstar, given that their growth prospects are mainly in the Asia-Pacific region."Everyone is dumbfounded," an official said."They just can't believe Qantas has lost the plot to that degree . . . it is the only way you do business in Asia."

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