Wirraway
24th Jun 2004, 15:48
Fri "The Australian"
Dixon scoffs at Asian competition in low-cost line
By Steve Creedy
June 25, 2004
QANTAS chief executive Geoff Dixon this week shrugged off the dangers of increasing no-frills competition in Asia and said he hoped the airline's Singapore-based low-cost carrier would provide a foot in the door for wider expansion in the fast-growing Asian market.
Mr Dixon also indicated Qantas would be prepared to pour more money into the Singaporean investment should it succeed.
Australia's flag carrier is investing $40 million to become a 49.9 per cent partner with Temasek Holdings and two Singaporean businessmen in the as yet unnamed Singaporean carrier.
It hopes to start flying with four aircraft and build to a fleet of 20 within three years.
The move is part of a push by the flying kangaroo to establish opportunities outside Australia. The initiative has included announcements in the past week of a flight attendant base in London and a code-sharing agreement with Air France.
"It's an opportunity," MrDixon said. "It's not a big investment for us. It could end up a big investment, but it'll only be a big investment if we believe it's tracking along well.
"It's $S40-$S50 million ($33-$42 million) - but it's something we believe is well worth the effort, particularly with good local partners.
"And the idea is to give us a better opportunity to take part in what is an expanding market," Mr Dixon said.
The Qantas chief said the airline was discussing details of destinations with Singapore authorities, but the new carrier would enter a number of Asian countries in the intra-Asian market.
Whether it would provide synergies with Qantas operations in Australia was "another matter", he said.
He was still hoping for a November start for the carrier. A team has been working in Singapore for about a month.
"They're in discussion with the authorities up there about obtaining an air operator's certificate, we've got commercial people on the ground, we've got people looking at launch and marketing, we've got people looking at uniforms - just everything," he said.
Analysts have labelled the Singapore move a high-risk strategy and Singapore Airlines has warned that only the fittest will survive the island state's increasingly competitive market.
At least four low-cost carriers have announced plans to start operating from Singapore this year, including SIA-backed Tiger.
But Mr Dixon said Qantas believed it had the firepower to fight off competitors. He did not yet see aggressive Malaysian-based low-cost carrier AirAsia as a competitor.
Not all the Asian start-ups would survive, he said.
"They won't all survive in Europe, all the low-cost carriers. There's a view they probably won't all survive in the United States and I suppose they won't all survive in Asia," he said.
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Dixon scoffs at Asian competition in low-cost line
By Steve Creedy
June 25, 2004
QANTAS chief executive Geoff Dixon this week shrugged off the dangers of increasing no-frills competition in Asia and said he hoped the airline's Singapore-based low-cost carrier would provide a foot in the door for wider expansion in the fast-growing Asian market.
Mr Dixon also indicated Qantas would be prepared to pour more money into the Singaporean investment should it succeed.
Australia's flag carrier is investing $40 million to become a 49.9 per cent partner with Temasek Holdings and two Singaporean businessmen in the as yet unnamed Singaporean carrier.
It hopes to start flying with four aircraft and build to a fleet of 20 within three years.
The move is part of a push by the flying kangaroo to establish opportunities outside Australia. The initiative has included announcements in the past week of a flight attendant base in London and a code-sharing agreement with Air France.
"It's an opportunity," MrDixon said. "It's not a big investment for us. It could end up a big investment, but it'll only be a big investment if we believe it's tracking along well.
"It's $S40-$S50 million ($33-$42 million) - but it's something we believe is well worth the effort, particularly with good local partners.
"And the idea is to give us a better opportunity to take part in what is an expanding market," Mr Dixon said.
The Qantas chief said the airline was discussing details of destinations with Singapore authorities, but the new carrier would enter a number of Asian countries in the intra-Asian market.
Whether it would provide synergies with Qantas operations in Australia was "another matter", he said.
He was still hoping for a November start for the carrier. A team has been working in Singapore for about a month.
"They're in discussion with the authorities up there about obtaining an air operator's certificate, we've got commercial people on the ground, we've got people looking at launch and marketing, we've got people looking at uniforms - just everything," he said.
Analysts have labelled the Singapore move a high-risk strategy and Singapore Airlines has warned that only the fittest will survive the island state's increasingly competitive market.
At least four low-cost carriers have announced plans to start operating from Singapore this year, including SIA-backed Tiger.
But Mr Dixon said Qantas believed it had the firepower to fight off competitors. He did not yet see aggressive Malaysian-based low-cost carrier AirAsia as a competitor.
Not all the Asian start-ups would survive, he said.
"They won't all survive in Europe, all the low-cost carriers. There's a view they probably won't all survive in the United States and I suppose they won't all survive in Asia," he said.
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