Singapore-based discount carrier Valuair and Qantas Airways' low-cost associate Jetstar Asia are in talks about a possible alliance, Jetstar said on Wednesday.

The airline, 49 percent-owned by Australia's Qantas, said in a statement it was looking at ways to enable the two firms to "work together or cooperate".

The confirmation of talks between the two could be a sign of moves towards consolidation in a sector dominated by losses.

It comes after the boss of Singapore low-fare carrier Tiger Airways said he had abandoned plans to break even this year and was looking for a partner airline.

Singapore business daily Business Times said on Wednesday that the talks could lead to a code-sharing agreement, an equity swap or even a merger of the two carriers.

"We are in talks to explore any form of cooperation," the paper quoted Valuair director Arthur Lee as saying. "Our sheet of paper is blank and our discussions are wide-ranging."

Singapore state investment agency Temasek Holdings owns a 19 percent stake in Jetstar Asia. Valuair was set up by former staff of Singapore Airlines.