Australian airline Qantas on Friday refused to confirm a report it is planning to establish a new premium carrier in Singapore, but said it was looking at ways to boost its international business.
The Australian Financial Review said the "Flying Kangaroo" wanted to set up a full-service subsidiary carrier in Asia much like its budget offshoot Jetstar Asia, which is also based in Singapore.
"The biggest struggle is that it (the new airline) will have the same look and feel of Qantas, down to the livery, but they can't call it Qantas," an unnamed source told the newspaper.
Sources said the new airline, which would have up to 20 aircraft in Singapore, would be less expensive to operate than from Australia, and would have the benefit of easier reach into Asia.
Qantas would not confirm the report, dismissing it as speculation, but it said its international business had not been performing to expectations, with market share in this area falling in recent years.
"We need to relook at this area of the business," a spokesman said.
To this end, the airline has established a team to look at Qantas' international product and service, possible new routes and ways to reinvigorate our offering, he said.
"The team is considering a range of options but no decisions have been made about the direction Qantas will be taking at this stage," the spokesman said, adding that recent media reports "are purely speculation and based on rumour".
Qantas chief executive Alan Joyce has previously spoken about expanding the airline's reach in Asia.
"We need to grow, we need to find new sources of income and profit, and we need to be able to take on the incredibly strong competition that is coming at us," Joyce said earlier this month.
The AFR report said any new Qantas subsidiary would be up to 49 percent owned by the airline, with a Singapore-based company owning the majority.
It said while other Asian cities were under consideration, Singapore appeared to be the better option due its greater reach into Asia.