Wirraway

Mon "Melbourne Age"

Qantas flies 'budget' Asia kite
By Scott Rochfort Sydney
August 18, 2003

Qantas plans to investigate the viability of establishing a low-cost operational hub in Singapore as the Australian and Singaporean Governments prepare to resume talks next month over a long-awaited open-skies agreement.

With Singapore Airlines keen to secure rights to fly the high-yielding Australia-US route, Qantas is understood to be working on battle plans to take the fight to Singapore Airlines in its home port. Qantas and major shareholder British Airways already have "seventh-freedom" rights, which allows them to set up bases in Singapore.

Talk that Qantas has such a plan, dubbed Operation Calypso, was reignited last week when the Flying Kangaroo revealed plans to restructure its operations into separate business units.

Reminiscent of a restructure undertaken by Singapore Airlines several years ago, the Qantas units will include aircraft operations (covering engineering and crew), maintenance, freight, catering, the Qantas airline and the Cairns-based budget carrier Australian Airlines.

It is understood the Qantas airline division will be divided into units covering international (Asia, Europe and Americas regions), domestic, City Flyer, leisure and, significantly, a separate Asia operation.

It is the additional "Asia" segment that has raised talk over a possible move into Singapore.

The speculation comes as Qantas and Air New Zealand get a final opportunity to put their case for an alliance to the New Zealand Commerce Commission. A five-day hearing in Wellington starts today with Air New Zealand's Ralph Norris and Qantas's Geoff Dixon due to address the commission.

On Thursday, Qantas is expected to report a full-year profit for 2002-03 of around $348 million, down $80 million from a year ago due to a drop in demand caused by the SARS crisis and the Iraq war.

Qantas public affairs manager Michael Sharp said he was unaware of plans for a presence in Asia.

But with Qantas set to cut labour and maintenance costs by diverting 25 per cent of its trans-Tasman capacity to its New Zealand subsidiary Jet Connect, a move to Singapore could help Qantas lower costs to Europe and Asia through what is its largest international hub.

However, the main obstacle for Qantas could be the response of the 14 unions that cover its workforce.

Singapore Airlines said it would "naturally not stand in the way" if Qantas set up a base at Changi Airport.

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TIMMEEEE

Oh dear, me thinks this will make Singapore Airlines all the more keen to acquire a share in the rat one way or another.

jetblues

Yawn - Virgin Blue has been looking at this for yonks.

Dixon finally learning Bransons spin doctor tactics !

Keg

I think you'll find that Dixon has been looking at this for yonks as well. I remember this subject getting a run well before Ansett fell over.

As long as he keeps looking at it and doesn't make a go of it! Anything which expands the business is fantastic IF job security and opportunities are around for those who have shown the company considerable loyalty over the past decade.

Col. Walter E. Kurtz

I can see it now....rich boys who are sons of the third world ruling class who can fit into the QF 'Profile' driving the planes for 1/4 of the pay.

Traffic

Col Klink

Why would he sons of the ruling class do the job for that kind of money when they can employ our wannabes for less than that?

Ralph the Bong

That's Globalisation for ya!