Qantas chief executive Geoff Dixon's dream of tapping into the burgeoning Asian airline market is turning into a financial black hole.

Three months after Qantas's 49 per cent-owned Jetstar Asia took its first flight from Singapore, the airline has conceded it may have to lease out half its fleet of eight Airbus A320s, which were due to be in operation by November.

The low-cost airline, which so far has cost Qantas $23.5 million, has been frustrated in its attempts to gain traffic rights into the key Indonesian and Chinese markets and is facing a challenge finding new destinations for its existing four jets.

Qantas spokesman Michael Sharp said Jetstar Asia "would look to lease out some of the [four extra] aircraft it ordered" if it did not gain additional traffic rights this year.

Jetstar Asia has pulled out of its Singapore to Pattaya , Thailand , run after just two months. It is understood the airline already has advertised within the industry to lease out the four remaining A320s due for delivery.

In addition to Taipei and Hong Kong, Jetstar Asia recently started services to Bangkok and is on the verge of gaining traffic rights into the Philippines using its existing four aircraft.

Industry sources have indicated the Chinese Government was not enamoured with Jetstar's decision to begin services to Taipei before finalising negotiations for landing rights with Beijing .

The airline is set to take delivery of its fifth leased A320 by May but has asked the aircraft's owner - International Lease Finance Corp in Los Angeles - to find another taker for the jet.

The four remaining jets have been leased from ILFC for five years and Jetstar may have to sub-lease them at a significant loss.

The new jets have relatively expensive fit-outs (and leasing conditions) which may make them difficult to sub-lease. Aside from the aircraft's leather interiors, they have the necessary technical specifications to gain extended-range twin-engine operations. This is a safety requirement that allows operators to fly beyond one hour of the nearest airfield.

Jetstar Asia's new chief executive, Ken Ryan, was unavailable for comment yesterday.

Macquarie Equities analyst Ian Myles said reports of the airline's troubles were of no major concern.

"At the end of the day it's what they've invested that's at risk. They've got bigger issues to think about," he said.

Last year Qantas noted its initial $S100 million ($78 million) investment in Jetstar Asia was equivalent to the price of two Boeing 747 wings.

Meanwhile, Virgin Blue's plans to invest in a Macau-based low-cost airline have reportedly moved to an advanced stage.

Despite facing a takeover bid from Patrick Corp, whose managing director Chris Corrigan has expressed his ambivalence to the deal, a Macau source close to the negotiations told the Herald an agreement was at an advanced stage.

"The lawyers are talking so it's definitely not off," the source said.

Virgin Blue spokeswoman Heather Jeffery said the talks were "still progressing".

Patrick Corp inched closer to gaining management control of Virgin Blue yesterday after lifting its stake to 49.3 per cent. In a sign the market is not holding its breath for a rival bid, Virgin's share price rose 1c to $1.91, only a whisker above Patrick's $1.90 takeover offer.