SYDNEY: Australia's national airline Qantas Friday said its budget offshoot Jetstar was in talks with Malaysia's AirAsia about a possible joint venture aimed at reducing costs.

"Qantas confirms that its wholly-owned subsidiary Jetstar and AirAsia have entered discussions regarding a potential cost-saving joint venture," the company said in a statement to the market.

"However, these discussions are at a preliminary stage and no binding agreements have been reached."

A spokesman for Jetstar said the venture was aimed at savings on the ground, and the airlines would still compete for passengers.

"It could be along the lines of non-competing areas of aviation that could deliver significant cost savings," the spokesman told AFP.

"An example could be some ground handling opportunities, an example could be some procurement opportunities."

Despite coming just days after Australia announced it would relax some foreign ownership rules for Qantas, the venture would not affect either airline's ownership, he added.

"These discussions have been had in complete isolation to what's come out in recent days," the spokesman said.

"The crux of this is about cost and pursuit of economies of scale amongst the Asian region's two largest low-cost carrier groups."

Kuala Lumpur-based AirAsia is the Asia-Pacific region's largest budget carrier, operating more than 400 daily flights to 60 destinations.

Jetstar operates almost 2,000 weekly flights to more than 50 destinations in Australia and the Asia-Pacific.

Australia on Wednesday unveiled a blueprint for its aviation industry for the next two decades which eases some restrictions on foreign ownership of Qantas while leaving the 'Flying Kangaroo' majority Australian owned.