AAP
Analysts doubts Singapore Airlines move
Analysts doubt Singapore Airlines will set up shop as Australia's third domestic carrier, saying it is more likely the Asian carrier will try and cultivate an alliance with Qantas Airways Ltd.
Singapore Airlines chief executive officer Dr Cheong Choong Kong today said the Australian airline market was a viable option for Singapore.
"It is viable, it can be viable, but as I said, it depends on so many conditions and one has to see whether those conditions are fulfilled," Dr Cheong said.
Rothschild Australia Asset Management transport analyst Troy Angus said Singapore Airlines might be trying to get Qantas or Virgin to the negotiating table.
"It appears that he is attempting to get either Virgin or Qantas to the table to do a deal with him," he said.
"In terms of the Asia-Pacific region, a Qantas-Singapore strategic alliance would be a very competitive entity in this region, particularly if it came on the back of Qantas doing a deal with Air New Zealand."
Qantas is currently in talks with Air New Zealand about a potential stake in the New Zealand carrier.
Qantas stocks, which have tumbled to year lows on war fears in recent weeks, ended only one cent weaker at $3.50 following the fresh Singapore speculation today.
"The market doesn't believe ... that Singapore will enter the domestic market, or it is already discounted in the share price.
"The truth lies somewhere in between. I suspect that the market may imply perhaps a 10 per cent probability of Singapore entering the domestic market, but not more than that.
"It would cost a ridiculous amount of money and they would be competing head on with the likes of Qantas in a domestic market which is not large enough to support three carriers."
Virgin Blue head of commercial David Huttner dismissed the fresh speculation as "nothing new".
"I can say emphatically there are no discussions between Virgin Blue and Singapore Airlines," Mr Huttner said.
İAAP 2002