Qantas is in talks to buy a stake in Vietnam's second-largest carrier, Pacific Airlines, which is transforming itself into a low-cost airline, a Pacific Airlines official says.

"The deal is being discussed," said an official at Ho Chi Minh City-based Pacific Airlines on January 25, asking not to be named. "Nothing is specific at the moment."

Qantas chief financial officer Peter Gregg said on January 23 in Singapore that Qantas was now carrying out a due diligence process with the Asian carrier, in which it could take only a minority stake due to ownership restrictions. Vietnam limits foreign ownership in Pacific Airlines to 30 per cent.

Its general director, Luong Hoai Nam, said the airline planned to offer low airfares from Ho Chi Minh City to Taipei and Kaohsiung in Taiwan, as the state-controlled Thanh Nien daily reported.