Air Canada might keep SingAir off LA route
Sat "Sydney Morning Herald"
Air Canada might keep SingAir off LA route
By Scott Rochfort
January 28, 2006
OPPOSITION is hardening within Federal Government ranks on allowing Singapore Air access to the trans-Pacific route after Air Canada announced this week it would begin flights between Los Angeles and Sydney early next year.
It will join Qantas and United in flying between the cities non-stop. The route accounts for as much as 20 per cent of Qantas's profits.
"It certainly diminishes the argument Singapore has for the need for more competition," Liberal backbencher and Qantas supporter Bruce Baird said. "From my point of view they [Air Canada] have more claim to fly across the Pacific than Singapore Airlines because they will be flying Canadians back home."
There is further speculation another US carrier may enter the capacity-starved route amid early signs of a recovery in the North American aviation market.
According to some reports, Singapore Air had already lost the support of some politicians. A federal cabinet aviation policy review due to be released in March is expected to heavily restrict Singapore Air's access on the LA route. There are suggestions Singapore Air might be allowed to operate a paltry three weekly services from Sydney to LA while being restricted from using its giant A380s on the route.
The Coalition's leader in the Senate, Nick Minchin, previously cited as a supporter of opening up the route, is now said to be against Singapore flying on it.
The Prime Minister, John Howard, has voiced caution over allowing Singapore Air on the route. And there is speculation National Party Leader Mark Vaile and the Liberal Party's Senator Ian Campbell have softened their pro-competition stance.
Qantas is expected to argue that with Singapore Air's entry to the route, it would be competing with three Star Alliance airlines.
The managing director of the Asia Pacific Centre for Aviation, Peter Harbison, said the Air Canada announcement could damage Singapore Air's ability to gain access to the Sydney to Los Angeles route.
"It's certainly going to have an effect on that whole process," he said.
However, some Coalition MPs, including Tourism Minister Fran Bailey, want more competition.
"For too long, the North American market has failed to meet expectations," Senator Bailey said in a statement. "We need to grow this tourism market to create more jobs in Australia."
WA backbencher Michael Keenan said the Air Canada announcement did not change his view.
"Consumers would still benefit from any increased levels of competition on that route," he said.
Investors shrugged off the prospect of Air Canada's entering Qantas's most profitable international route. Qantas shares rose 7c to $4.08.
Macquarie Equities analyst Paul Huxford said the entry of Air Canada could be "a blessing in disguise" for Qantas as Singapore Air would find it more difficult to point to a lack of competition on the route.
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