QF Gains First Stage Approval for SIN Airline, SQ is Angry
Thread Starter
Join Date: May 2007
Location: Singapore
Posts: 270
Likes: 0
Received 0 Likes
on
0 Posts
QF Gains First Stage Approval for SIN Airline, SQ is Angry
Qantas plan reportedly irks Singapore Airlines - MarketWatch
IF this is a purely air rights bilateral negotiation though, and countries have to trade things off, what will SIA get in return? SYD-LAX? But that's hardly the cash cow everyone thought it was.
Heck there isn't even a high profile convicted drug trafficker on death row at this stage for Singapore to offer not to execute in return for other benefits from Australia.
Knowing the Singapore government though, it usually merrily gives away rights to foreign carriers without asking anything in return for SIA, because as long as pax traffic increases through Singapore, the govt couldn't care less if SIA or any other airline does it. However, can an island like Singapore support 6 home based carriers? Sounds ridiculous no?
SYDNEY -(MarketWatch)- Qantas Airways Ltd. has gained approval from Singapore's Economic Development Board to establish a premium subsidiary carrier in the city state, prompting protests from Singapore Airlines Ltd. , The Australian Financial Review newspaper reported Monday.
Citing people with knowledge of the deal, the report said Qantas' proposal has progressed to the ministerial level in Singapore and recently reached the government's cabinet office for debate.
Qantas faces an intense lobbying campaign from Singapore Airlines opposing the plan, the report said.
Australia's flag carrier has announced publicly that it's planning to set up a premium subsidiary carrier in either Singapore or Malaysia.
Citing people with knowledge of the deal, the report said Qantas' proposal has progressed to the ministerial level in Singapore and recently reached the government's cabinet office for debate.
Qantas faces an intense lobbying campaign from Singapore Airlines opposing the plan, the report said.
Australia's flag carrier has announced publicly that it's planning to set up a premium subsidiary carrier in either Singapore or Malaysia.
Heck there isn't even a high profile convicted drug trafficker on death row at this stage for Singapore to offer not to execute in return for other benefits from Australia.
Knowing the Singapore government though, it usually merrily gives away rights to foreign carriers without asking anything in return for SIA, because as long as pax traffic increases through Singapore, the govt couldn't care less if SIA or any other airline does it. However, can an island like Singapore support 6 home based carriers? Sounds ridiculous no?
About as ridiculous as 100% foreign owned mining companies stripping the mineral wealth out of Australia and paying a minimal amount of tax on their massive profits.
But it's in our national interest apparently, wait for your government to use the same line. But don't worry, a Singaporean national will take on a 51% stake in it, although more then likely totally funded through Qantas, just like Jetstar Asia
Look up Mr Choo Teck Wong - He's more then likely involved in this deal as well to satisfy the legalities of it all..
But it's in our national interest apparently, wait for your government to use the same line. But don't worry, a Singaporean national will take on a 51% stake in it, although more then likely totally funded through Qantas, just like Jetstar Asia
Look up Mr Choo Teck Wong - He's more then likely involved in this deal as well to satisfy the legalities of it all..
Thread Starter
Join Date: May 2007
Location: Singapore
Posts: 270
Likes: 0
Received 0 Likes
on
0 Posts
Choo Teck Wong was basically given a loan fully from Qantas to "buy" 51% of jetstar asia. QF consolidates Jetstar Asia's accounts into its Group accounts. This is possible under IFRS, if QF can prove that it in effect has majority control over Jetstar Asia, even though on paper it only owns 49%.
QF in effect gets nearly 100% of the economic benefits (and losses) that Jetstar Asia accrues. Choo probably gets a nominal director's fee and nothing more - and QF probably has a hundred back to back agreements to ensure this.
The Singapore government is fully aware of this but closes one eye because of the supposed economic benefits the QF Group brings to Singapore. Up till today, besides Malaysia in the beginning, no foreign govt has challenged Singapore that Jetstar Asia is not effectively a Singaporean owned and controlled airline.
The reporting line of the Jetstar Asia CEO is to Bruce Buchanan, not anyone based in Singapore.
At air rights negotiations, Jetstar Asia is represented by the Civil Aviation Authority of Singapore, which awards them rights alongside SQ, Silk Air and Tiger.
Alan Joyce knows he won't get such a fantastic deal out of Malaysia or any other country in Asia, which always protect their own oligarchs and airlines. The Singapore government doesn't even attempt to protect its own national carrier where it has a 54% stake in.
QF in effect gets nearly 100% of the economic benefits (and losses) that Jetstar Asia accrues. Choo probably gets a nominal director's fee and nothing more - and QF probably has a hundred back to back agreements to ensure this.
The Singapore government is fully aware of this but closes one eye because of the supposed economic benefits the QF Group brings to Singapore. Up till today, besides Malaysia in the beginning, no foreign govt has challenged Singapore that Jetstar Asia is not effectively a Singaporean owned and controlled airline.
The reporting line of the Jetstar Asia CEO is to Bruce Buchanan, not anyone based in Singapore.
At air rights negotiations, Jetstar Asia is represented by the Civil Aviation Authority of Singapore, which awards them rights alongside SQ, Silk Air and Tiger.
Alan Joyce knows he won't get such a fantastic deal out of Malaysia or any other country in Asia, which always protect their own oligarchs and airlines. The Singapore government doesn't even attempt to protect its own national carrier where it has a 54% stake in.
Does this whole Asian strategy hinge on getting a deal with either he Malaysians or the Singaporens? I thought the broad outline of the deal would have had to have been set prior to announcing the strategy. Otherwise, both the Malays and the Singaporeans know that QF is commiting to it and can drive a hard bargain. The success of this bold strategy seems totally dependant on a deal not yet struck....is that a fair statement? If so , the strategy is nothing more than a punt....gambling with the future of the company.
Join Date: Jun 2005
Location: Australia
Posts: 156
Likes: 0
Received 0 Likes
on
0 Posts
So let me get this staright:
Qantas has committed to the purchasing of aicraft from Airbus,yet it still currently doesn't have the right to operate,or even open this new airline in SIN?
Are these people loonies or what? What if SQ's objections get up and shut the whole thing down? What happens to the aircraft we have ordered?
Surely you order the aircraft AFTER you get the permission to operate the airline
Qantas has committed to the purchasing of aicraft from Airbus,yet it still currently doesn't have the right to operate,or even open this new airline in SIN?
Are these people loonies or what? What if SQ's objections get up and shut the whole thing down? What happens to the aircraft we have ordered?
Surely you order the aircraft AFTER you get the permission to operate the airline
There is a limit to how much Singapore Airlines can grow, they might add 2-3 new destinations a year but they aren't going to double in size any time soon.
The economic benefit to Singapore of being a major air hub for the region with double digit percentage growth in passenger numbers every year is far greater, especially if some of those passengers stop over and drop a few thousand in the casinos.
When Singapore Airlines were first set up they were told to either make money or they would be closed down, they've done very well so far. In future their percentage carried of passengers through Changi will decline even though their total numbers will increase.
Singapore faces increasing competition from the middle east, particularly Dubai as a transit point. The more airlines Singapore can attract, the better even to the detriment of SIA.
The economic benefit to Singapore of being a major air hub for the region with double digit percentage growth in passenger numbers every year is far greater, especially if some of those passengers stop over and drop a few thousand in the casinos.
When Singapore Airlines were first set up they were told to either make money or they would be closed down, they've done very well so far. In future their percentage carried of passengers through Changi will decline even though their total numbers will increase.
Singapore faces increasing competition from the middle east, particularly Dubai as a transit point. The more airlines Singapore can attract, the better even to the detriment of SIA.
Join Date: Aug 2011
Location: goulburn
Posts: 393
Likes: 0
Received 0 Likes
on
0 Posts
I reckon that Singapore Airlines would be laughing having this lot as competition rather than those who actually know how to run an airline.
Now lets see how JB plays this one with his new friends. Let them send all their money in SGD and have it taken off them, then he has a completely competitor free zone in Australia.
The only problem is that the smartest guys in the room would have long gone and left others to clean up the mess and write out all the cheques.
Good one guys, just keep believing the dream because thats all it will ever be!!!!
Now lets see how JB plays this one with his new friends. Let them send all their money in SGD and have it taken off them, then he has a completely competitor free zone in Australia.
The only problem is that the smartest guys in the room would have long gone and left others to clean up the mess and write out all the cheques.
Good one guys, just keep believing the dream because thats all it will ever be!!!!
Join Date: Oct 2009
Location: Alabama, then Wyoming, then Idaho and now staying with Kharon on Styx houseboat
Age: 61
Posts: 1,437
Likes: 0
Received 0 Likes
on
0 Posts
Let me think for a minute, decision to make - Fly QF to Singapore on most likely an old 747 configured for dwarfs, no leg room, crap in flight service, or fly Singapore airlines on an A380, A330 or B777 with great service, more leg room and an overall quality that smashes QF.
Silly Irish knigget.
Silly Irish knigget.
Join Date: Jan 2008
Location: Tallong NSW
Posts: 280
Likes: 0
Received 0 Likes
on
0 Posts
What if Singapore Airlines gets rolled on this but then says hey we want to do something similar in Australia and finance the puppet Australian 51% and fly the LA routes?
Ben Sandilands has been arguing that this is a logical consequence of the Qantas strategy and could have some bad unintended consequences for Qantas.
Like put it out of business.
Someone have any argument that says this can't happen? I reckon if the Singaporeans are going roll over on this they will expect us to do the same thing for them.
Ben Sandilands has been arguing that this is a logical consequence of the Qantas strategy and could have some bad unintended consequences for Qantas.
Like put it out of business.
Someone have any argument that says this can't happen? I reckon if the Singaporeans are going roll over on this they will expect us to do the same thing for them.
Thread Starter
Join Date: May 2007
Location: Singapore
Posts: 270
Likes: 0
Received 0 Likes
on
0 Posts
The thing is why does SQ want to set up a 51% Australian owned entity to fly internationally, sham structure or not? QF wants Singapore because it is a low tax, lower cost and better located city compared to any city in Australia
Would SQ really want an Australian airline which is in a higher tax, higher cost location? No, SQ would want to fly their planes via Australia with lower tax and costs.
If QF Group starts sending 9V registered planes on SIN-Australia-USA routes using SIN-based crew (and they can do so now if they wish), why on earth would SQ want to saddle itself with Australian taxes and costs to compete with QF who would fly to and through Australia with Singaporean taxes and costs?
Singaporean carriers can already fly SIN-AKL-LAX with unlimited 3rd, 4th and 5th freedoms between Singapore NZ and the USA. As a "Singaporean" carrier, Jetstar Asia can send their A330s with a 3K code from SIN to AKL and straight through to anywhere in the USA.
QF is mad though. SQ + Silk Air fly to 100 destinations from SIN and the feed potential is enormous. QF plus 3K fly to what, 20 destinations from SIN? It would be 30 at best?
I'm not sure Jetstar Asia is creating that many jobs for Singaporeans. The last few Jetstar flights I took ex SIN had no Singaporean flight crew (there were Brits, Japs and Aussies). The cabin crew - maybe of the 4 each flight, 1-2 would be Singaporeans and the other 2 would be Japanese? The check-in staff of their contract ground handler in SIN were all foreigners from the Philippines.
Would SQ really want an Australian airline which is in a higher tax, higher cost location? No, SQ would want to fly their planes via Australia with lower tax and costs.
If QF Group starts sending 9V registered planes on SIN-Australia-USA routes using SIN-based crew (and they can do so now if they wish), why on earth would SQ want to saddle itself with Australian taxes and costs to compete with QF who would fly to and through Australia with Singaporean taxes and costs?
Singaporean carriers can already fly SIN-AKL-LAX with unlimited 3rd, 4th and 5th freedoms between Singapore NZ and the USA. As a "Singaporean" carrier, Jetstar Asia can send their A330s with a 3K code from SIN to AKL and straight through to anywhere in the USA.
QF is mad though. SQ + Silk Air fly to 100 destinations from SIN and the feed potential is enormous. QF plus 3K fly to what, 20 destinations from SIN? It would be 30 at best?
I'm not sure Jetstar Asia is creating that many jobs for Singaporeans. The last few Jetstar flights I took ex SIN had no Singaporean flight crew (there were Brits, Japs and Aussies). The cabin crew - maybe of the 4 each flight, 1-2 would be Singaporeans and the other 2 would be Japanese? The check-in staff of their contract ground handler in SIN were all foreigners from the Philippines.
Join Date: Aug 1998
Location: ...second left, past the lights.
Posts: 1,101
Likes: 0
Received 1 Like
on
1 Post
who cares what the Singaporeans think?
Don't be naive. You should!
They are not only one of the worlds most cashed-up & profitable Governments but are an absolute Goliath, through their "Tamasek" holdings, they own or part-own through Temasek-linked companies: SQ; Rex/Pelair/Airlink; Optus; Tiger; Spicejet; Virgin Atlantic; Jetstar Asia; multiple shipping ports; multiple banks... I won't go on.
Thread Starter
Join Date: May 2007
Location: Singapore
Posts: 270
Likes: 0
Received 0 Likes
on
0 Posts
Chocks Away: I think he was kidding!
Temasek doesn't and has never owned a stake in Rex, it was a group of Singaporean businessmen who bought them out privately. Temasek is also no longer a shareholder in Jetstar Asia, and their expansion ex SIN has been better under full QF ownership (via their current proxy) rather than with Temasek owning 51% of it with their proxies.
Anyway QF has been asked to make further submissions to the Singapore govt on how their new airline will benefit Singapore economically. I guess this means SQ has to demonstrate to the government how QF's new airline will be detrimental to Singapore economically (which would be harder for SQ to prove).
SQ is sitting on S$7 billion of cash and has such a lazy balance sheet that they keep giving their shareholders 10-14% dividends each year - unheard of for any other airline.
Anyway if it were Malaysia, QF would have to prove how their presence in KL would benefit the pockets of X number of individuals!
Now for the supposed destinations that this RedQ (what a ghastly name) will fly to ex SIN:
We all know that PVG, PEK and CAN do not have any more slots at popular periods - this is why JQ's new PEK service has a 0250 departure. SQ has sat on the popular arrival times since what, before the fall of the Berlin Wall so they will continue to hold those grandfather rights. Unlikely RedQ will get arrival times popular with business travellers
For the legacy carriers ex SIN we have:
HKG - 7 daily each for SQ and CX. First flight out at 7.30am last flight out at 8.30pm at both the SIN and HKG end. RedQ cannot match this.
KUL - 8 a day Silk Air and 3 a day SQ. 8 a day MH with the 3 airlines codesharing. RedQ would almost need 11 A320s to service SINKUL 20 times a day?
BKK - 5 a day SQ 5 a day TG
CGK - 8 daily SQ 8 daily Garuda
MNL - 4 daily SQ, 3 daily Philippine Airlines
Mumbai - 17 weekly SQ (compared to *cough* QF's 3 weekly)
DEL - 14 weekly SQ
Chennai - 14 weekly SQ/Silk Air
Bangalore -14 Weekly SQ/Silk Air
Tokyo - 28 weekly SQ
Taipei - 21 weekly SQ
Where can 11 A320s for RedQ fly to?
1 daily Guangzhou
1 daily Taipei
3 daily Hong Kong
3 daily KUL
3 daily Jakarta
2 daily Shanghai if they get the slots
3 daily BKK
2 daily Manila
2 daily Bali
1 daily Mumbai
1 daily Delhi
I think even that is pushing it?
Temasek doesn't and has never owned a stake in Rex, it was a group of Singaporean businessmen who bought them out privately. Temasek is also no longer a shareholder in Jetstar Asia, and their expansion ex SIN has been better under full QF ownership (via their current proxy) rather than with Temasek owning 51% of it with their proxies.
Anyway QF has been asked to make further submissions to the Singapore govt on how their new airline will benefit Singapore economically. I guess this means SQ has to demonstrate to the government how QF's new airline will be detrimental to Singapore economically (which would be harder for SQ to prove).
SQ is sitting on S$7 billion of cash and has such a lazy balance sheet that they keep giving their shareholders 10-14% dividends each year - unheard of for any other airline.
Anyway if it were Malaysia, QF would have to prove how their presence in KL would benefit the pockets of X number of individuals!
Now for the supposed destinations that this RedQ (what a ghastly name) will fly to ex SIN:
We all know that PVG, PEK and CAN do not have any more slots at popular periods - this is why JQ's new PEK service has a 0250 departure. SQ has sat on the popular arrival times since what, before the fall of the Berlin Wall so they will continue to hold those grandfather rights. Unlikely RedQ will get arrival times popular with business travellers
For the legacy carriers ex SIN we have:
HKG - 7 daily each for SQ and CX. First flight out at 7.30am last flight out at 8.30pm at both the SIN and HKG end. RedQ cannot match this.
KUL - 8 a day Silk Air and 3 a day SQ. 8 a day MH with the 3 airlines codesharing. RedQ would almost need 11 A320s to service SINKUL 20 times a day?
BKK - 5 a day SQ 5 a day TG
CGK - 8 daily SQ 8 daily Garuda
MNL - 4 daily SQ, 3 daily Philippine Airlines
Mumbai - 17 weekly SQ (compared to *cough* QF's 3 weekly)
DEL - 14 weekly SQ
Chennai - 14 weekly SQ/Silk Air
Bangalore -14 Weekly SQ/Silk Air
Tokyo - 28 weekly SQ
Taipei - 21 weekly SQ
Where can 11 A320s for RedQ fly to?
1 daily Guangzhou
1 daily Taipei
3 daily Hong Kong
3 daily KUL
3 daily Jakarta
2 daily Shanghai if they get the slots
3 daily BKK
2 daily Manila
2 daily Bali
1 daily Mumbai
1 daily Delhi
I think even that is pushing it?
Last edited by DrPepz; 25th Oct 2011 at 06:11. Reason: Typo
Join Date: Apr 2008
Location: On a long enough timeline the survival rate for everyone is zero
Posts: 731
Likes: 0
Received 0 Likes
on
0 Posts
but but but... Bruce said they are going to fly up to 400 aircraft by 2020 in Asia.
Jetstar to invest $470m in Singapore hub
Originally Posted by Bruce Buchanan
He said that the company is aiming to maintain a 20 per cent share of the Asia Pacific low-cost carrier market and might need to have as much as 400 aircraft by 2020.
"The total (fleet size of) the low-cost carrier market (in Asia-Pacific) is about 450 aircraft today and we envisage it to grow to in excess of 2000 aircraft by the end of the decade," he said on the sideline of a media briefing in Singapore.
"To maintain 20 per cent market share by 2020, we need about 400 aircraft," Buchanan added without elaborating when the carrier will start making orders of those aircraft.
"The total (fleet size of) the low-cost carrier market (in Asia-Pacific) is about 450 aircraft today and we envisage it to grow to in excess of 2000 aircraft by the end of the decade," he said on the sideline of a media briefing in Singapore.
"To maintain 20 per cent market share by 2020, we need about 400 aircraft," Buchanan added without elaborating when the carrier will start making orders of those aircraft.
Not only would RedQ struggle to compete on frequency but who in their right mind would choose an A320 (even a Neo) over the premium product of an SQ A380/777?
Strategy beggers belief...
Strategy beggers belief...
Not only would RedQ struggle to compete on frequency but who in their right mind would choose an A320 (even a Neo) over the premium product of an SQ A380/777?
Nemo Me Impune Lacessit
Join Date: Jun 2004
Location: Derbyshire, England.
Posts: 4,094
Received 0 Likes
on
0 Posts
Tried to book (on the internet), wife to SIN on QF, wouldn't allow QF9 and 10, only one sector allowed at around $900, other sector had to be Jetstar, around $600.00 and one schedule offered was 13 hours via Sydney and Darwin! Stuff it, let's try SIA, three direct flights a day, $947.00 total! Game set and match to SIA. Maybe could have done better on QF through a travel agent but why bother when it is so easy at home?
I used to work for SIA and I cannot see the Singapore government allowing any agreement that would harm SIA commercially, they are very proud of their airline. Nor can I see QANTAS getting any agreement to base a new airline there without a quid pro quo for SIA. SIA always did want to own a chunk of QF, maybe that will be the price, 50%? or maybe 51%!
Where will the pilots come from, where will they be based? CoL quite high in Singapore.
I used to work for SIA and I cannot see the Singapore government allowing any agreement that would harm SIA commercially, they are very proud of their airline. Nor can I see QANTAS getting any agreement to base a new airline there without a quid pro quo for SIA. SIA always did want to own a chunk of QF, maybe that will be the price, 50%? or maybe 51%!
Where will the pilots come from, where will they be based? CoL quite high in Singapore.