AirAsia-Jetstar merger rumours - Asia Pacific airline share wrap

Qantas CEO, Allan Joyce and AirAsia CEO, Tony Fernandes, are discussing a potential merger between AirAsia and the Australian carrier's units, Jetstar and Jetstar Asia, according to reports in Malaysia's StarBiz newspaper.

Fernandes told StarBiz "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.''

According to the report, talks are still in preliminary stages. Malaysia Airlines is also in talks with Qantas over a possible alliance between the network airlines.

Last week, Qantas and British Airways called off merger talks, while AirAsia's founders recently shelved plans to take the carrier private.

Malaysia Airlines and Qantas shares fell 6.8% and 3.8% yesterday, respectively, while AirAsia was steady.

The merger rumour mill will be busy this holiday period.

Asia Pacific selected airlines daily share price movements (% change): 22-Dec-08