SIA to cover domestic routes
By Geoffrey Thomas
August 8 2002
Singapore Airlines will be operating on Australian domestic routes within nine months, according to one of Australia's leading analysts.
Peter Harbison, founder and managing director of the Sydney-based Centre for Asia-Pacific Aviation, said the Australian market was critical for the Singaporean-based airline.
"There are considerable advantages for the airline and, more importantly, there are major disadvantages in not getting to the domestic market," he said. "There is so much compelling financial value in flying domestic routes that I just cannot see how anybody would not see just how obvious it is that they need to be here.
"I believe the airline is very serious and, taking into account the approval process, they will be flying by the end of the first quarter of 2003."
Mr Harbison expects Singapore Airlines will take on an Australian partner, which would then enable the airline to fly international services from Australia to other destinations aside from Singapore.
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Singapore Airlines spokesman Stephen Forshaw confirmed yesterday that a team had recently been looking at terminal gate accessibility at airports around the country.
Mr Forshaw said the airline was keeping its option open and considering various scenarios but had not committed to become Australia's third airline and cautioned on the timing.
However, various authorities around Australia believe that the airline is close to giving a go-ahead.
"I know of several people who have been interviewed for positions," said one airport official.
The airline and its Star Alliance partners have been losing feed traffic from Australia since the demise of Ansett and are also having to book European and United States travellers on to Qantas for domestic flights.
Singapore Airlines alone has 77 flights a week into Australia, all using high-capacity Boeing 777 and Boeing 747 equipment.
It has not escaped the attention of Singapore Airlines executives that while the rest of the world has experienced a downturn in travel after September 11, the Australian domestic market has remained robust and almost immune.
This week SIA shares have taken a battering, falling to an eight-month low, on fears that passenger and cargo demand could be hit if the US economy suffered another downturn. Since last Friday the market has wiped $S2.1 billion ($A2.2 billion) from SIA's market value, with its shares tumbling to $S11.10. Mr Harbison said Singapore Airlines had up to $4 billion in cash reserves to fund the launch of a new airline.
Airline analysts suggest Singapore Airlines will not use the Ansett name, although the airline would probably initially use 144-seat A320s, similar to the aircraft used by Ansett.
Mr Harbison suggests the airline would target all the prime trunk routes and progressively move into regional areas. The biggest Australian regional market, the regional east coast now has a Singaporean connection.
A group of Singaporean investors has a 30 per cent stake in the new Regional Express, which has risen from the ashes of former Ansett subsidiaries Kendell Airlines and Hazelton Airlines.
The Singaporeans are part of a consortium called Australiawide Airlines, which bought the airlines last week in a deal worth $40 million.
- West Australian