/07 06:00
Singapore Air May Regain Access to Australian Market (Update1)
By Dudley White
Sydney, Sept. 7 (Bloomberg) -- Singapore Airlines Ltd., whose Australian strategy collapsed with Ansett Holdings Ltd., may form an alliance with Australia's newest airline, enabling its passengers to fly to more Australian cities on one ticket.
Regional Express, formed last month by the combination of Hazelton Airlines Ltd. and Kendell Airlines Pty., is also talking with Qantas Airways Ltd. and Virgin Blue Airlines Pty. about linking flights, spokesman Armon Hicks said.
"We'd like to be able to offer our passengers a system where we can book them on a single ticket all the way through,'' Hicks said.
Singapore Airlines flies to five Australian cities. It lost its toehold in Australia's A$10 billion ($5.4 billion) domestic market when Ansett failed a year ago. Asia's most profitable carrier owned a quarter of Ansett's parent, Air New Zealand Ltd., a stake that was diluted when New Zealand bailed the carrier out.
Singapore Airlines lost money on its investments in Air New Zealand and Virgin Atlantic Airways, in which it has a 49 percent stake, in the year ended March 31. It wrote down S$267 million ($152 million) from its share of Ansett's failure and lost S$45.7 million from associated companies, including Virgin Atlantic.
For the year, profit fell 61 percent to S$632 million.
Two's Company . . .
Qantas and Virgin Blue, owned by British entrepreneur Richard Branson, have shared Australia's domestic aviation market since Ansett's collapse. Qantas holds about 80 percent of the market, with Virgin holding the remainder.
In July, Sydney Airports Corp. said it has held talks with Singapore Airlines about access to Australia's largest airport, which may indicate a plan to start a rival for Qantas and Virgin Blue.
Shares of Singapore Airlines have fallen 3.6 percent this year, outperforming the Singapore Straits Times Index, which fell 11.2 percent.
Such an arrangement with Singapore Airlines would give Regional Express a link to international flights. Regional Express flies to 31 mostly rural destinations in New South Wales, Victoria, South Australia and Tasmania, according to the company's Web site.
Hazelton and Kendell were the regional operations of failed airline Ansett Holdings Ltd., previously Australia's No. 2 carrier behind Qantas. The two companies were acquired by Australiawide Airlines Pty. and then renamed Regional Express.
Regional Airlines biggest planes are 36-seaters, the Straits Times newspaper reported today.