Singapore wants a Shot at the Aussie/USA Route
From Breaking News on The Australian's website.
Qantas under attack
By Nicki Bourlioufas
January 10, 2005
SINGAPORE Airlines has challenged the Federal Government to allow it to compete against Qantas on the lucrative Australia-US route while the Australian carrier has again defended its service standards.
"The time has come," Singapore Airlines chief executive Chew Choon Seng told a daily newspaper in a report published today.
"What we are looking for ideally is open skies beyond Australia to America," Mr Chew reportedly told the newspaper.
Qantas is protected from competition on the US-Australia trade route due to restricted-sky agreements between the Australian and Singaporean governments.
But Singapore Airlines reportedly wants a share of the lucrative route which has helped boost Qantas' earnings to record levels at time when many airlines are going bankrupt.
Mr Chew reportedly pointed to the $648.8 million profit posted by Qantas in 2004.
"The results from Qantas have been promising. Demand for travel on the route is as stable as it can get. By all measures stability has returned," Mr Chew told The Australian Financial Review.
The Australia-US passenger route is one of Qantas' most profitable due to its popularity and a lack of competition.
An open-skies arrangement with Singapore would allow that country's main carrier to fly direct to the US. Qantas would also have greater rights to travel between Australia and Asia.
Qantas chief executive Geoff Dixon said an open-skies arrangement would deliver an unfair advantage to Singapore Airlines.
"Open skies with Singapore would not deliver reciprocal opportunities for Australian carriers such as Qantas due to restrictions in Australia's bilateral agreements with third countries," Dixon said, according to the report.
Meanwhile, Qantas has defended its service standards in the pages of The AFR - the third time in the past week.
John Borghetti, executive general manager of Qantas, said the airline's service standards were world-class. He denied Qantas' cost-cutting had dragged down first- and business-class service.
"By any comparison, Qantas is one of the leading airlines in the world," Borghetti said in his third letter to the AFR in the past week.
That hasn't convinced all travellers. "It's a cash cow for Qantas. They are just milking it and they are not returning any investment in the route and it shows in the customer service," said a regular business and first-class traveller between the US and Australia, who declined to be named.
However, the traveller, who as a freight-forwarder regularly arranged the freight of goods between the US and Australia, said Qantas' trade performance was far superior to its passenger performance as there was more competition and investment by Qantas on the trade route.
My comment - Bring it on. The competition will be great for the traveller.