Malaysia Airlines (MAS) today confirmed that talks with Australian flag carrier Qantas on a possible aircraft maintenance joint venture had ceased.

"We have informed the Malaysia bourse that the MOU (memorandum of understanding) has ceased. Therefore, there are no active discussions between us," Idris Jala, Malaysian Airlines managing director told reporters.

"Of course there will be discussion if and unless the MOU is renewed - today it's not," he added.

The proposed plan was announced in December 2007.

News reports on Monday said Qantas had scrapped the tie-up following a slump in travel demand which has forced the airline to cut capacity and ground planes.

No more joint venture

The Australian carrier announced job cuts of up to 1,750, slashed its profit forecast by more than half and deferred new plane orders on Tuesday, saying it had no choice if it hoped to weather the global downturn.

The MOU between Qantas and Malaysia Airlines subsidiary MAS Aerospace Engineering (MAE) was signed in late 2007 and the joint venture was scheduled to begin operations in Malaysia in 2008.

The joint venture would have targeted the Asia-Pacific aircraft maintenance, repair and overhaul market, which was forecast to reach US$15 billion by 2016.

Idris had previously said the joint venture would provide a world-class facility in Kuala Lumpur.

"Our priority will be to develop Kuala Lumpur as a maintenance, repair and overhaul hub for the Asia-Pacific region for services," he was quoted as saying in 2007.