Qantas to set up LCC in Singapore

[bonvol]

My sources tell me this is going to be officially announced veeery soon.

Be interesting to see if they are on the money. Stay tuned.

[Wirraway]

Fri "Sydney Morning Herald"

Qantas eyes discount Asian airline
By Scott Rochfort
March 19, 2004

Qantas is considering an investment in a new low-cost Asian airline, possibly teaming up with the Malaysian low-cost operator AirAsia.

The move is seen as a bid to take a key role in the rapidly growing South-East Asian aviation market and attack Singapore Airlines in its home town.

AirAsia, considered a star performer in Asia, has already applied to Singapore authorities for an air operator's certificate to fly out of Changi airport and hopes to have the airline up and running by September.

Qantas chief executive Geoff Dixon last month confirmed his airline was considering the option of investing in an Asian airline, especially if its proposed alliance with Air New Zealand fell through.

With Virgin Blue already cited as a possible partner with AirAsia, Qantas yesterday declined to comment on speculation of its involvement.

"We just don't comment on market speculation such as this," said Qantas public affairs manager Michael Sharp.

But while several analysts had mixed views on the merits of a Qantas and AirAsia partnership, one key connection in the deal is managing director of the Irish company PlaneConsult, Conor McCarthy.

Aside from holding a 5 per cent stake in Air Asia, the ex-Aer Lingus executive's consultancy played a key role in helping Qantas draw up the blueprint for its domestic offshoot, Jetstar.

Singapore Airlines, which this week applied for a licence to fly its own low-cost offshoot, Tiger, said yesterday it was aware of the rumours.

Senior public affairs manager Innes Willox said Singapore Air "was aware of the reports that Qantas is considering involvement in a low cost carrier based in Singapore".

If Qantas establishes an airline in Singapore, Mr Willox said the Australian and Singaporean governments should resume their Open Skies talks and give Singapore Air rights to fly from Australia to the US.

One industry insider said a deal with AirAsia would not only help Qantas's aspirations to enter the South-East Asian market but give it a handy outlet to phase out its ageing fleet of Boeing 737-300s.

AirAsia plans to double its fleet of Boeing 737-300s to 30 by the end of 2004.

After flying domestic services in Malaysia since late 2001, AirAsia recently launched services into Thailand and Singapore with its first Indonesian services scheduled for next month.

AirAsia formed a partnership with the Thai Prime Minister Thaksin Shinawatra's Shin Corp earlier this year to commence domestic services in Thailand.

It is unclear whether Qantas will take an interest in the planned $US1 billion ($1.34 billion) sharemarket listing of AirAsia in September or whether it will form a Singapore-based joint venture with the airline.

Singapore Air recently enlisted RyanAir and the billionaire airline financier David Bonderman to co-own its low-cost offshoot, Tiger.

Low-cost airlines are a new phenomenon in South-East Asia, dramatically boosting airline traffic in the region. Qantas now wants a slice of the market.

Qantas as a brand will concentrate mainly on high-yielding business routes, with Jetstar set to focus on lower-yielding domestic economy traffic. The other economy operation, Australian Airlines, will target low-yielding Asian tourist destinations such as Bali but will be based in Australia.

Qantas shares fell 2c to $3.49 yesterday, while on the Singapore stock exchange Singapore Air shares rose 20c to $Sing11.20.

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[itchybum]

AirAsia. Are they the ones with the Qantarse-look-alike red tail livery? You look at the "kangaroo" on the tail and think you've had one too many beers.

Maybe it was always gonna happen??

[Wirraway]

Fri "The Australian"

Geoffstar over Singapore
Michael West
March 19, 2004

THE dilemma for Geoff Dixon as Qantas moves to establish its discount airline in Singapore is whether he goes it alone or takes equity in one of the two or three new low-cost carriers sprouting up over there.

The word is that Dicko has secured the backing of several investors already (there's a 51 per cent local ownership limit required to set up in Singapore).

The other options are a joint venture with either Tiger Air (ex-Ryanair staffers), AirAsia or ValuAir.

Air Asia is reportedly Dicko's favoured option, and he's been in extensive talks with its principals, but he's also been courting the lads from ValuAir, who have fairly solid prospects and decent financial backing.

Despite being headed by a former Singapore Airlines executive, ValuAir lacks management expertise. This is where the Mangy Old Roo comes in as it, er ... fights to survive.

The question must now be asked of Dicko, given he has secured undertakings from local investors and has a tight business plan which would see him operating Airbus 320s (the same as domestic discount start-up GeoffStar) from Singapore to points such as Phuket, Bangkok, Jakarta, Kuala Lumpur and perhaps Hong Kong, Bali and somewhere in Indonesia, when might it be appropriate for the market to be advised.

The merchant bankers are swarming around to do the deal and the business plan has been hawked about in Singapore and Malaysia for a few months.

Dicko's thinking settled on Singapore thanks to its English legal system and more conducive politics.

The prevalence of "opportunity incentive payments" in other Asian markets such as India and prohibitive politics in Malaysia and Thailand made Singapore a more attractive bet.

What does it mean for Qantas then? A deal at the right price for the right operation in growth Asian markets would be applauded. Though Dicko has a bit on his hands with GeoffStar.

And then there's the issue of Roo's fleet, which has been around since the Wright Brothers. A lengthy depreciation policy helps but at some stage Qantas will have to bite the bullet and upgrade.

No doubt Dicko, or his successors, would prefer to do this when the stock price was up and the cost of capital down.

Though probably not before the board meeting in Toulouse in July where it is all hard labour.

The exacting demands of visiting the Airbus factory mean Qantas directors might not even get a chance to slip across to the Grand Cru vineyards of Bordeaux for a little Chateau Margaux, or Lafite, or Mouton. Perhaps to accompany their black truffle soup or pigeon in the style of Rainier of Monaco or roasted sole and scallops in velvety pumpkin sauce. Cassolette of morels and frogs legs perhaps?

Toulouse is to win, mes amis. To win is Toulouse.

=============================================

[spinout]

I think the that mainline pilots should be very afraid…..

[Buster Hyman]

Another rumour is a low cost flight training school out of Essendon...a low cost water bomber service in California...a high cost executive jet service out of Sydney and a low cost air force in New Guinea!

Ease up Geoff! I can't keep up!:rolleyes:

[Wirraway]

Sat "Sydney Morning Herald"

Singapore wants piece of LA action
By Scott Rochfort
March 20, 2004

The Singapore Government is at loggerheads with Australia and is pushing to compete with Qantas on the lucrative trans-Pacific route.

This follows revelations in the Herald on Friday that Qantas was considering setting up a low-cost airline on Singapore Airlines' home turf.

Both governments agreed last September - after the SARS crisis - to protect Qantas's golden LA route until there was "greater stability in the aviation industry".

But news Qantas was eyeing a possible share of the Singapore operations of the yet-to-be-launched AirAsia or ValuAir appears to have opened a serious rift in the retiming of the talks.

The Singapore Government said it wanted to restart talks that would give both airline's unlimited "fifth freedom" rights out of each country.

"Singapore is keen to resume talks with Australia to further liberalise our air services agreement as the global aviation industry has shown improvements since the end of last year. Major airlines, including Qantas, have been reporting higher operating profits," Singapore Ministry of Transport spokesman Khong Su-vie said.

But the Federal Transport Minister John Anderson's office said it had no plans to resume talks.

Given recent criticisms Mr Anderson had unfairly protected Qantas's commercial interests, the minister's spokesman Paul Chamberlin ruled out talks in the "short and medium term".

"They've [airlines] been very solid for about three weeks. We'd need to see an extended period of stability, if you know what I mean," he said.

In the 12 months to January this year, outbound traffic to the US rose 24.2 per cent, while inbound traffic only fell 3.1 per cent, largely a result of the rising Australian dollar.

Qantas makes about one-third of its international profits from the LA route and Goldman Sachs JBWere estimates Qantas controls 72 per cent of direct flights to LA, with United Airlines controlling the rest.

The airline declined to confirm a Herald report it was considering setting-up a Singapore operation with the Malaysian low-cost carrier AirAsia. Singapore Air spokesman Innes Willox said: "The competitive environment must be fair and if Qantas wishes to establish an operation in Singapore, it is only proper that SIA be given reciprocal access to the Australian market, including the right to fly trans-Pacific services between Australia and the US to help meet the growth and development needs of the Australian tourism industry."

But Qantas public affairs manager Michael Sharp said Singapore Air already had the rights to set up a domestic carrier in Australia and to fly to the US via New Zealand.

Singapore wants a piece of the high-yielding business class-dominated direct routes to the US. Since the withdrawal of Air NZ direct flights from Sydney to the US early last year, Qantas and United have constantly achieved load factors of close to 90 per cent on that route.

============================================

[Capt Fathom]

Yawn!
Another day, another LCC. Who cares!

[*Lancer*]

Reading between the lines of all the stuff in the media it sounds like just an investment bonvol, rather than a specific branch of the operation. Unless of course CASA decides to create an open-sky arrangement with Singapore as they have done with NZ (ala jetconnect)... but that's a can of worms even Anderson wouldn't (shouldn't couldn't) go near :ooh:

[rescue 1]

Jetconect is still not being used effectively in the war against PacBlue, or any other new comer. It is still being held back by old management styles and old contracts with AirNZ. The only thing cheap is the salaries!:(

[Wirraway]

Wed "Sydney Morning Herald"

Qantas target defers float talk
By Scott Rochfort
March 24, 2004

http://www.smh.com.au/ffximage/2004/03/23/airasia.jpg
All aboard for cheap adventure . . . AirAsia hostesses promoting discount fares to Chiang Mai and Phuket. Photo: AFP

Speculation over Qantas's plans to invest in a low-cost Asian airline intensified yesterday when the Malaysian budget carrier, AirAsia, "deferred" an announcement about its planned sharemarket listing.

Fuelling speculation Qantas could be eyeing a stake in the airline, AirAsia did not give a reason for holding off details on its planned September public issue, valued at as much as $1.3 billion.

"We are still tightening a few issues and, once we are ready, in a week or two, we will make the announcement," AirAsia spokesman Jeamie Lee said.

Yet despite talk Qantas could form a partnership with AirAsia before it went public, one analyst said: "It's quite possible they [AirAsia] are leading us on a merry dance. They have no reason to tell us the truth in advance."

Qantas still declined to say whether it had held talks with AirAsia, or with Valuair, which is based in Singapore.

Last month, Qantas chief executive Geoff Dixon reportedly told analysts he was spending "far too much" time in Asia.

Last August, Qantas dismissed a Herald report that it had plans for its own low-cost Singapore airline, dubbed by market insiders as Operation Calypso.

Given speculation Qantas could team up with AirAsia in setting up a Singapore airline, Singapore's Minister for Transport, Yeo Cheow Tong, said Qantas would need to seek 51 per cent Singaporean ownership for the airline.

"They don't have a licence but the requirement with regard to setting up an airline in Singapore is a very simple one. The airline that is going to set up here needs to be majority owned by Singaporeans," he said.

But it is understood Singapore may relax this rule if the Australian Government gives Singapore Air freedom to compete on Qantas's highly lucrative Sydney to Los Angeles route.

The low-cost carrier Valuair talked down speculation it could form a partnership with Qantas.

"We've not spoken to Qantas," said Valuair's Nilesh Pritam.

Headed by the former Singapore Airlines managing director Lim Chin Beng, Valuair took delivery of its first A320 over the weekend and expects to start flights in May. After singling out Jakarta, Bangkok and Hong Kong as its three key destinations, the airline also hopes to fly to Perth.

Meanwhile, Virgin Blue shares fell 5c to $2.36 amid concerns over its growth plans.

But Virgin dismissed "misrepresentations and factual errors" over its growth plans and projected fleet size. The Virgin statement to the ASX came after Goldman Sachs JBWere cut its projected fleet size from 56 in March 2005 to possibly below 50, compared with today's 44.

But Virgin said its fleet growth was still on track according to its prospectus, with the airline expected to acquire eight aircraft - and "return" three - before March 2005.

===========================================

[Wirraway]

Dow Jones
Wednesday March 24, 11:19 AM AEST

Australia's Virgin Blue Silent On AirAsia Tie-Up Report

BRISBANE (Dow Jones)--Virgin Blue Holdings Ltd. , Australia's second largest airline, Wednesday declined to comment on media report that it's close to a deal with AirAsia.

If the deal goes ahead, AirAsia would sell a stake to Virgin Blue in "a matter of weeks," according to The Asian Wall Street Journal.

"Virgin Blue has stated for some time that it has held talks with various carriers around the world including a number of carriers in South East Asia," said David Huttner, head of strategy and communications at Virgin Blue.

"We continue to always look at any new opportunity, but we will not comment on market speculation and we've got nothing to announce at this time," he added.

There have also been some media reports, that Virgin Blue's biggest rival, Qantas Airways Ltd. , is considering investing in AirAsia, a Malaysian no-frills carrier.

AirAsia plans to raise US$200 million during an initial public offering to fund its regional expansion, reports The Asian Wall Street Journal citing executive director, Kamarhudhin Meranun.

At 0015 GMT, Virgin Blue shares were down three cents, or 1.3%, at A$2.33, while the broader market was up 5.3 points at 3395.4 points.

==========================================
Dow Jones
Tuesday March 23, 11:05 PM AEDT

Singapore's Changi Moves Ahead With Budget Air Terminal

SINGAPORE (Dow Jones)--Singapore Changi Airport is moving ahead with plans to build a terminal for low cost carriers, or LCCs, even as it upgrades facilities to accommodate the world's biggest commercial airplane.

To stay on top of the competition, the airport is also moving overseas and has also teamed up with a local partner in bidding to manage India's Mumbai and Delhi airports.

Changi has been facing growing competition from airports in the region, which are expanding to cater to future air traffic growth. Thailand's Bangkok, for example, will open a new international airport in 2005, with a capacity to handle 45 million passengers.

Changi's passenger traffic numbers, which fell 14.9% in 2003 to 24.7 million due to the SARS outbreak, has been recovering and is expected to grow to about 32 million in the next few years.

The Singapore Transport Ministry confirmed that it was in "serious talks" with Singapore Airlines Ltd. LCC affiliate Tiger Airways to set up the budget airline terminal.

"We're confirming the details with them (Tiger Airways). Once they are satisfied it meets their needs and sign on the dotted line, we'll proceed with the construction," Transport Minister Yeo Cheow Tong said earlier.

Yeo added that the government will build the terminal, estimated by analysts to cost between S$20 million to S$30 million (US$1=S$1.6891), even if only one airline was interested.

Established Malaysian LCC, AirAsia, has indicated that it will be keen to use the new terminal while Singapore-based ValuAir, which is poised to start flying in May, intends to use existing facilities at Changi.

However, ValuAir, set up by SIA veteran Lim Chin Beng, has said it will seriously consider using the budget airline terminal at a later stage.

While such plans are underfoot, the Civil Aviation Authority of Singapore, or CAAS, said in an e-mail Tuesday it intends to spend S$45 million to modify facilities at Changi Airport to accommodate the huge Airbus A380 double-decker jumbo jet.

The works, to be completed by end-2005, include widening runways, modifying air bridges to accommodate the 550-seat A380, extension of baggage belts, and increasing the size of the rooms holding the passengers just before actual boarding by 5%-10%.

Not content with strengthening its home base, Changi Airport has moved to increase its regional footprint.

The CAAS said in the e-mail that Changi Airport and India's Bharti Enterprises will be forming a 50:50 consortium to bid for the development and management of Mumbai and Delhi airports.

The bid for 74% in the two airports, envisioned to be among India's biggest private-sector investments in infrastructure, will run as high as US$1 billion each. The Indian government owns both airports, which are profitable and handle 63% of the country's international passenger traffic.

Changi Airport's experience overseas so far has involved providing consultancy services in airport engineering, management and operations, and undertaking projects in China, India, Philippines, Pakistan, Fiji and Seychelles.

It also owns a 50% equity stake in Alterra Partners through Singapore Changi Airport Enterprise, which has invested in airports in London, Costa Rica, Peru and Curacao.

==========================================

[Wirraway]

Tues "Business Times" (Singapore)

Qantas has no licence to run budget airline here
But Cheow Tong says key term is simple: it must be majority ownedby S'poreans
By DONALD URQUHART

(SINGAPORE) Qantas has no existing licence to operate a low cost carrier out of Singapore, contrary to last week's Australian media reports, transport minister Yeo Cheow Tong said yesterday.

Fasten your seatbelts: Valuair is among three budget airlines awaiting an operator's licence. It is set to fly in May

'No, they don't have the licence at the present moment,' Mr Yeo said in reference to a report in Melbourne's Herald-Sun on Friday, that Qantas had been granted a licence to operate a discount airline from Singapore.

The report indicated the licence had been awarded more than 10 years ago during negotiations between the two countries on access to Australian airports.

'But the requirement for setting up an airline in Singapore is a very simple one,' Mr Yeo added, noting that the key stipulation is that it be majority owned by Singaporeans.

The report said Australia's flag carrier was considering partnering Malaysia's AirAsia to form a low-cost airline based in Singapore, a move the report also described as a back-up plan for Qantas if regulators blocked the carrier's proposed tie-up with Air New Zealand.

AirAsia has since confirmed Qantas is among the carriers it is in talks with as it seeks to expand its regional presence.

The low-cost carrier has applied for an air operator's licence (AOL) from the Civil Aviation Authority of Singapore, along with Singapore-based budget start-ups Valuair and Singapore Airlines' Tiger Airways.

Mr Yeo pledged to try to expedite the processing of the AOL applications, which normally take between 6-9 months, but cautioned 'we do have manpower constraints because the review has to be done by people who are trained for the job.

'The processing of AOL applications is something that is a well-established process worldwide,' entailing specific procedures and processes that must be adhered to.

'Ensuring that the whole process is done properly will take normally between 6 and 9 months by most of the air authorities and we're no different,' Mr Yeo said.

On the government's recent announcement that it would proceed with the construction of a new budget airline terminal at Changi Airport if the low cost carriers wanted one, Mr Yeo confirmed talks were ongoing.

'We are still in discussion with Tiger Airways, they are the only ones who have told us they are interested so far and we are going through the details with them and once they are satisfied that it meets their needs and they sign off on the bottom line, then we will proceed with the construction.

'We don't want to do something nobody wants,' he added.

Mr Yeo noted that one interested budget carrier was all the government needed to give the go-ahead for construction, 'and it will be sized to the needs of the particular airline'.

'So, if it is Tiger and they tell us they plan to carry so many passengers a year then we will size it accordingly,' he said.

Like Changi's existing terminals and the upcoming T3, airlines will not directly bear the cost of the construction as it is an investment by the Civil Aviation Authority of Singapore, but the carriers will pay for the usage of it, he said.

============================================

[go_dj]

Virgin Blue Holdings Ltd. , Australia's second largest airline, Wednesday declined to comment on media report that it's close to a deal with AirAsia.

Does anybody get the feeling AirAsia is playing Qantas and
Virgin Blue off against each other?

[rescue 1]

I remember this same tussle over another regional Australian airline - Hazelton!

And the end result was someone paying WAY too much.

go_DJ may be on the right track.

[SeldomFixit]

Capt'n Fathom - a reply such as yours would brand you a total tosser in some circles. I however, will refrain from calling you a total tosser.

[Wirraway]

Dow Jones
Wednesday March 24, 9:29 PM AEDT

Singapore's Tiger Airways Picks Airbus A320s For Fleet

SINGAPORE (Dow Jones)--Singapore Airlines Ltd.'s budget airline affiliate - Tiger Airways - Wednesday said it has chosen new Airbus A320 airplanes for its fleet.

Tiger Airways, which expects to commence flights in the fourth quarter of 2004, said it will lease the first four aircraft from Airbus.

A statement from Airbus Wednesday said two leased aircraft will be delivered to Tiger Airways in July, while the other two will be delivered in December.

"With the new aircraft, we will benefit from simplicity in operations, better fuel efficiencies and lower maintenance costs. These cost savings will be passed on to our customers. Tiger will offer the lowest possible fares across its network," Patrick Gan, Tiger Airways' chief executive, said in a statement.

The budget carrier's application for its Airline Operators' Certificate is being processed.

Tiger Airways will be based at Singapore's Changi Airport as will its rival Valuair, set up by SIA veteran Lim Chin Beng.

Valuair took delivery of its first two A320 aircraft March 20 and expects to commence flights from early May.

In contrast to Tiger Airways' A320 configuration which will seat 180 passengers, Valuair's aircraft seats 162 passengers.

And unlike most other budget airlines, Valuair intends to provide some in-flight service.

Copyright © 2004Dow Jones & Company Inc. All rights reserved.

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[Wirraway]

Thurs "Melbourne Age"

Qantas, Virgin keep low profile on Asia plans
By Scott Rochfort
Sydney
March 25, 2004

http://www.smh.com.au/ffximage/2004/03/24/tony_fernandes,0.jpg
Tony Fernandes of AirAsia ... 'We are talking to Qantas about cheap fares,' he told a Malaysian newspaper. Photo: AFP

Qantas and Virgin Blue kept the market guessing over their low-cost plans in Asia yesterday, after Malaysian budget carrier AirAsia dismissed talk it planned to set up a Singapore-based airline with Qantas.

Amid speculation that both Australian airlines might still have an interest in the planned sharemarket listing of AirAsia, chief executive Tony Fernandes told a Malaysian newspaper: "We are talking to Qantas about cheap fares."

But neither Mr Fernandes nor Qantas would explain exactly what this meant.

Virgin Blue also declined to confirm an Asian Wall Street Journal report that the airline could buy a stake in AirAsia in coming weeks.

"I'm only saying what I've been saying for three months and that is, 'Virgin Blue is in regular discussions with a number of airlines around the world'," said Virgin head of strategy David Huttner. "It has been long established that we've had talks with a variety of South-East Asian airlines."

As rumours persisted that Qantas was even looking at taking a stake in Singapore-based Valuair, some analysts expressed scepticism over the mixed signals about the plans of Qantas and Virgin in the region.

Qantas has plenty on its plate with the forthcoming launch of Jetstar and the multibillion-dollar upgrade of its fleet, while analysts questioned whether Virgin Blue had enough funds to expand outside Australia.

AirAsia also appointed Credit Suisse First Boston and RHB Sakura Merchant Bankers as book runners for its planned float,valued at up to $1.3 billion.

AirAsia said in a media statement: "The IPO strengthens our balance sheet, further cuts our existing low costs at US2.5¢ per ASK (available seat kilometre) and accelerates our growth plans throughout Asia."

But the airline would not give further details of its IPO.

==========================================

[Left2primary]

Rumoured that someone with a striking resemblance to G D was seen in Singapore yesterday [24/3/04].

Methinks that he wasnt there on holiday.

L2P