"The industry is due for consolidation," Chew told the Nine Network's Business Sunday on Sunday.
He said that the industry was expected to make a $US6 billion annual loss when oil prices were below $US50 a barrel. Oil prices are now around $60 per barrel.
"This cannot go on indefinitely," Chew said.
Singapore's Transport Minister, Yeo Cheow Tong, told Business Sunday that Qantas and Singapore Airlines should be encouraged to talk to each other.
"I don't see the two airlines agreeing to a merger at this point of time because there are many, many issues to be discussed," Yeo said.
"But hopefully as time passes Australian regulators will appreciate better what's happened on the international scene and the fact that the Australian market is actually quite competitive.
"They may agree to a merger between Qantas and one of the other airlines serving Australia, whether its Singapore Airlines or another airline."
Chew said Qantas and Singapore Airlines had made comments last year about talks going on in relation to the sharing of maintenance facilities the new Airbus 380 super jumbo.
"It makes sense that neither of us duplicate facilities but rather put our heads together and see where we can have joint efforts and share facilities and thereby spread costs," he said.
Chew said the international airline industry should not be constrained and should be allowed to operate like many other major businesses in the world.
However, the airline industry was an industry where strict lines were drawn across national boundaries.
"Therefore the idea of a merger is an appealing one in economic philosophy, but it's an idea before its time, unfortunately," Chew said.
Last month, Qantas Airways chief executive Geoff Dixon said the airline was likely to merge with a foreign carrier in the next five to 10 years.
But Qantas was not likely to surrender its identity as an Australian carrier and that any merger would likely take for the form of a dual-listed structure.
Dixon played down as "hypothetical" suggestions by Prime Minister John Howard and then incoming Deputy Prime Minister Mark Vaile of a merger with Singapore Airlines.
Source: AAP NewsWire