Qantas has today confirmed that it is now in talks with the Fiji government to sell its 46 percent stake in Air Pacific as it lobbies for capacity to introduce Jetstar flights to Fiji.

The airline, which is competing with Virgin Blue for seats on the Fiji route, admits it is looking at the potential sale in a submission to the International Air Services Commission, arguing the case for its low-cost subsidiary.

The proposal stemmed from a review of its investments in light of the global financial crisis.

Qantas spokesperson, David Epstein confirmed to The Australian last night that the Air Pacific stake is under review and the airline is in discussions with the Fiji government about possible terms.

Epstein said talks with the Fiji government had mapped out a possible way forward but there would need to be agreement on valuation procedures before there is a commercial conversation.

This includes maintaining commercial arrangements with Fiji's international carrier.

It is understood the Fiji government is favourably disposed to the idea of Qantas exiting its stake to allow it to take complete control of Air Pacific and remove vetoes the Australians have on some decisions.
 
Qantas brought forward its plans to introduce Jetstar on the route after Virgin Blue applied for an additional 1,260 seats and to transfer another 1,260 from Pacific Blue to allow it to operate V Australia's 360-seat Boeing 777-300ERs on the route.

Jetstar plans to start daily services between Sydney and Nadi using the 213-seat Airbus A321 aircraft from next April.

Qantas wants to codeshare with Jetstar services on the route and to continue codesharing with Air Pacific.

However there will be no codeshare between Jetstar and Air Pacific and the low-cost carrier will operate independently of other carriers on the route.