Qantas eye options for international business

Australian airline Qantas Monday said its international business was loss making and in need of a shake-up, but it was too early to say whether it would build a new service out of Asia. Chief executive Alan Joyce said international business was a "real problem for the Qantas group" and could not continue unchanged because it was losing market share and profits. "We can't have our head in the sand," Joyce told reporters at Sydney Airport. "Our international business is loss making. It has severe structural challenges. "We have to look at the range of options that are available for us to rescue that business to make sure it is successful and viable going forward." Reports have suggested that Qantas is looking to Asia, possibly Singapore or Malaysia, as a base for a premium international service to offset weak international business. The company is battling rising fuel costs, greater competition and a soaring Aussie dollar that is hurting holiday travel to Australia. Joyce did not rule out a new base, but said it was too early to say what direction the airline would take from a review ordered of its long-haul operations, saying the carrier was examining all options. "There's a lot of things that are being reviewed at the moment. It's too premature for us to rule anything in or anything out at this stage," Joyce said, but added that some options included "activities in Asia". "It's not going to be a silver bullet, one item that's going to fix the international problems for Qantas," he said. The idea of an Asia-based Qantas subsidiary comes as the airline is facing the threat of strike action by unions representing some employees, including pilots and engineers -- concerned about job losses. The Australian and International Pilots Association, which is in talks with the airline on wages and conditions, criticised the Asian option as being against the best interests of Australians, customers and airline workers. "Australians want Qantas, not Qantasia," said union president Barry Jackson last week. Joyce said the unions were damaging their members' job security by attacking the Qantas brand. Qantas posted a four-fold increase in net profits to Aus$241 million (US$255 million) for the six months to December 2010, despite an Airbus A380 engine explosion that sent shudders through the industry.