AirAsia’s chief executive has said that Qantas should choose Kuala Lumpur over Singapore for its new Southeast Asian base.

Tony Fernandes said on Wednesday to reporters from the Australian Financial Review that Malaysia was a stronger bet for the Australian flag carrier. He said that although Singapore is indeed a better business hub that its passenger traffic was primarily transit traffic, much like Dubai. He said that connectivity is the key.

The news comes as Fernandes’ low-cost Kuala Lumpur-based firm is amid talks with Qantas and Malaysia’s national airline (MAS) for a three-way tie-up.

Qantas announced its plans to launch a new hub in Malaysia or Singapore in August, which it says will host a new premium carrier to offset heavy losses seen in its Australia-based international division.

Negotiations had reportedly been put on hold as a result of volatile fuel prices and the current global economic environment. However, Qantas officials said earlier in the week that talks were ongoing and that both Singapore and the Malaysian capital were the primary candidates to base future operations.

Mr Fernandes declined to comment directly regarding the status of Qantas talks, but said to reporters that the Australian airline had made an offer under its previous chief, Geoff Dixon, to buy his low-cost carrier, which he had refused.