Etihad last week received interim approval from Australia's competition regulator for an alliance with Virgin Blue.
Despite rejecting the Etihad proposal, Qantas urged the Australian Competition and Consumer Commission (ACCC) to block the deal with Virgin.
Mr Joyce says Qantas was offered the same arrangement to fly into Abu Dhabi, but "we looked at the numbers and we didn't believe it could be economic".
"In terms of our deal with Etihad, we saw that deal as limited because we have our own operation into London and we've got a great relationship with British Airways," he told a business audience in Sydney.
"The economics of it did not stand up for us and we very much looked at our relationship with British Airways and our relationship with Air France, which is the way we service the European markets, as being very key to us."
When asked if he thought Virgin would make money from the Etihad deal, Mr Joyce said he could not speak for his opponent, but for Qantas it was not a feasible proposal.
Mr Joyce says he objects to Etihad's alliance with Virgin because the airlines were not being put through the same process that Qantas and British Airways had to once endure.
"We objected to the process they were going through, not to the deal itself, because the process for us, it is not the same process Qantas had to go through," Mr Joyce said.
He added that although he is a big supporter of airline partnerships, a consolidation is harder in practice than in theory.
Yet despite his belief that "joint ventures are the way for the airline industry to go forward", Mr Joyce says he will not be looking for any partners in the Middle East.
"We don't see the need with the Middle Eastern carriers, because what is happening with the Middle Eastern carriers is that they are competing with the Asian-hub carriers."
Mr Joyce is confident that Qantas's relationship with British Airways will enable it to compete against the Middle East carriers.
"The Middle Eastern carriers are taking share from Singapore Airlines, Malaysian and Thai Airways and there's a battle of the hubs happening," Mr Joyce said.
"But because of our links with British Airways, we're staying out of it and our performance has been stable compared to what we've been seeing with the Middle Eastern carriers."
Mr Joyce also said he did not think the Virgin-Air New Zealand deal would eventuate.
"If you read the ACCC determination on this, it is quite strong so I think this one will be quite difficult," he said.
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