Singapore wants a Shot at the Aussie/USA Route

[Lodown]

From Breaking News on The Australian's website.

Qantas under attack
By Nicki Bourlioufas
January 10, 2005

SINGAPORE Airlines has challenged the Federal Government to allow it to compete against Qantas on the lucrative Australia-US route while the Australian carrier has again defended its service standards.

"The time has come," Singapore Airlines chief executive Chew Choon Seng told a daily newspaper in a report published today.

"What we are looking for ideally is open skies beyond Australia to America," Mr Chew reportedly told the newspaper.

Qantas is protected from competition on the US-Australia trade route due to restricted-sky agreements between the Australian and Singaporean governments.

But Singapore Airlines reportedly wants a share of the lucrative route which has helped boost Qantas' earnings to record levels at time when many airlines are going bankrupt.

Mr Chew reportedly pointed to the $648.8 million profit posted by Qantas in 2004.

"The results from Qantas have been promising. Demand for travel on the route is as stable as it can get. By all measures stability has returned," Mr Chew told The Australian Financial Review.

The Australia-US passenger route is one of Qantas' most profitable due to its popularity and a lack of competition.

An open-skies arrangement with Singapore would allow that country's main carrier to fly direct to the US. Qantas would also have greater rights to travel between Australia and Asia.

Qantas chief executive Geoff Dixon said an open-skies arrangement would deliver an unfair advantage to Singapore Airlines.

"Open skies with Singapore would not deliver reciprocal opportunities for Australian carriers such as Qantas due to restrictions in Australia's bilateral agreements with third countries," Dixon said, according to the report.

Meanwhile, Qantas has defended its service standards in the pages of The AFR - the third time in the past week.

John Borghetti, executive general manager of Qantas, said the airline's service standards were world-class. He denied Qantas' cost-cutting had dragged down first- and business-class service.

"By any comparison, Qantas is one of the leading airlines in the world," Borghetti said in his third letter to the AFR in the past week.

That hasn't convinced all travellers. "It's a cash cow for Qantas. They are just milking it and they are not returning any investment in the route and it shows in the customer service," said a regular business and first-class traveller between the US and Australia, who declined to be named.

However, the traveller, who as a freight-forwarder regularly arranged the freight of goods between the US and Australia, said Qantas' trade performance was far superior to its passenger performance as there was more competition and investment by Qantas on the trade route.



My comment - Bring it on. The competition will be great for the traveller.

[Lead Balloon]

They'll get all my business in a heartbeat.

What with a $11,000 round trip business class ticket (Qantas) from Syd to LAX it wouldn't take much for Singapore to grab loyalty.

[The_Cutest_of_Borg]

No doubt SQ would like open skies everywhere, why not? They have no domestic market for anyone else to cherry pick and are a small nation fortunately situated at the crossroads of Asia.

There is competition on the route already. Singapores arguments don't mean much. They have simply seen a lucrative route and wish to cherry pick it.

Why don't we see them demanding access to the Syd-Nou route? Or the Melbourne-POM. Darwin to Dili return? Or a thousand other thin, profitless routes? They can get stuffed as far as I am concerned.

[Mr.Buzzy]

So what did Dicko see when he decided to pick this fight when he started Jet* asia? A lucrative route/s?....and his intentions are?...to cherry pick it/them?.... Its been said before, Dicko picked the fight now he had better finish it, for all our sakes, regardless of company!!!!!!!!

bbzbbzzzzbzbbzzzzzzzzzzzzzbbbzz

[The_Cutest_of_Borg]

Buzzy, Jetstar Asia, operates over what would be the Asian equivalent of the Australian domestic arena. If Singapore want to do a VB and start up here, they are free to do so already.
They don't want to do that however. They merely wish to cherry pick QF's most profitable route. Why give away profits that stay in Australia. Why give them to Singapore if we don't have to?

In fact isn't Jetstar Asia partially owned by the Sing govt?

[Rich-Fine-Green]

Bring it on:

Let SQ fly anywhere in the USA other than LAX. QF refuse to fly anywhere other than LAX so why not let another carrier fly SFO or other.

1. If SQ fly to anywhere other than LAX - I will be on it.
2. QF have screwed their loyal FF with the new system.
3. Failed attempts to get tickets a number of times on selected dates during the past month must mean full flights or very high load factors.
4. Competition will mean better service and deals on such a profitable route. IF JAL can offer Business SY-Tokyo-SFO for 5k then 11k on QF must be lucrative!.

[swh]

Thought SQ were going to back door this, as a major shareholder in Virgin and get Virgin to fly to the USA, and codeshare.

Politically easier for people to accept Virgin flying to the USA and Asia in the eight Australian registed A340-600 aircraft that are planned....opps did I say that ...

:ok:

[DJ737]

Politically easier for people to accept Virgin flying to the USA and Asia in the eight Australian registed A340-600 aircraft that are planned....opps did I say that ...

I thought it was ex SQ -500's which SQ are not too happy with?

SQ are gonna replace them with B777-300ER equipment.

Probably better suited to a SYD-LAX type operation, due to payload restrictions on the SIN-LAX nonstops.....oops did i say that:uhoh:

DJ737

The Roo Rooter :ok: :E

[swh]

DJ...

SQ are happy with the 345, they were not happy with the earlier CFM powered 340's.

SQ dont have 8x345's

SQ dont have 346's

The 345 does SIN-JFK, up to an 18 hr flight, not SIN-LAX, SIN-YVR which the 777 does now.

The B777-300ER being a new unproven aircraft in SIngapore terms does not have CAAS ETOPS approval to allow it to do the direct SIN-JFK polar route (it would need at least 138 minutes), which the 345 does at present.


:hmm:

[HotDog]

It's not just SQ coveting SYD/LAX but so is Cathay and Virgin. Eventually, QF is going to lose the monopoly on this sector.

[Kaptin M]

Do any of the Yank airlines use their reciprocal rights (which I assume form part of the agreement) to ply this route?

If it is so lucrative, and they don't, why not?

[The_Cutest_of_Borg]

United fly to both LAX and SFO. Others have rights but they are unused at the moment.

[Wirraway]

Tues "Australian Financial Review" 11:05 AEDT

Qantas hits back

Qantas yesterday hit back at a call by Singapore Airlines for access to the lucrative Australia-North America route, saying such a move would give the Asian airline an unfair advantage in the region. Qantas chief financial officer Peter Gregg said Singapore Airlines already enjoyed considerable access to the Australian aviation market, which he described as one of the most liberal in the world. Mr Gregg's comments came after Singapore Airlines CEO Chew Choon Seng told The Australian Financial Review that it was time the federal government opened up the United States route since the global aviation industry had recovered from the combined shocks of the September 11, 2001, terrorist attacks in the US and the severe acute respiratory syndrome epidemic. Qantas was 3¢ higher at $3.72.

========================================
news.com.au 15:05 AEDT

Australia to discuss US route
January 11, 2005

TRANSPORT ministers from Australia and Singapore will meet next month to discuss opening routes from Australia to the US to Singapore Airlines, a move hotly contested by Qantas, a government spokesman said today.

A spokesman for Transport Minister John Anderson said the talks with his Singapore counterpart Yeo Cheow Tong would take place in mid-February in Canberra and had been called at Singapore's request.

The meeting comes amid talk of cut-throat competition between the two carriers after Qantas set up a low-cost Asian airline based in Singapore, Jetstar Asia, putting it in direct competition with the Singapore flag carrier in its home market.

Flights between Australia and the US are currently restricted to airlines from the two countries concerned and are among Qantas' most profitable routes.

The spokesman said the government was happy to talk to the Singaporeans about the issue and had some points of its own it wished to raise.

"The government will make its mind up after that and won't be pressured into making a decision," the spokesman said.

Australia would also be raising issues about limited access to the European market out of Singapore, he said.

Qantas has argued that it needs protection amid the turbulent world airline market after the attacks of September 11, 2001 but Singapore Airlines argues that the airline's soaring profits suggest otherwise.

The Australian flag carrier reported a record net profit of $648.4 million for the year to June 2004.

Qantas has said giving Singapore Airlines access to the Australia-US routes would effectively put it at a competitive advantage.

"Qantas could still not compete with Singapore Airlines on the majority of Singapore Airlines' routes between Singapore and the US due to restrictions in Australia's bilateral agreements with third countries," said Peter Gregg, the airline's chief financial officer.

Singapore Airlines also had the option to establish a wholly-owned Australian-based airline if it wished, he said, noting that fuel prices remain at record highs and the global aviation industry subject to many external shocks.

"Qantas is not protected and does not seek protection," Gregg said.

Agence France-Presse

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

[Going Boeing]

T C o Borg

American Airlines do have rights on the SYD-LAX route and they exercise those rights by buying capacity on the QF flights (approx 6 flights per day). I believe that Northwest have rights but at this stage ar not using them - they might have lost them because normally it's a case of "use them or lose them".

Giving SQ rights on the SYD-LAX route would only be the foot in the door before they apply for rights on other potentially lucrative routes eg SYD-NRT, SYD-HKG, SYD-SHA. The island nation has nothing to offer in return so it would simply be a case of the revenue going to the Singapore economy at the expense of the Australian and US economies. All of us Australian taxpayers would lose out.

There is no level playing field in commercial aviation and our Government must recognise this and thus play hardball rather than be Mr Niceguy.

[stable approach]

SWH..
The 345 actually does do SIN-LAX. The 777 does SIN-LAX and SIN-YVR via Incheon, Seoul.

[Zapatas Blood]

American, Northwest, Continental and Hawaiian have all operated to Oz at some time. America West were planning to when they operated 747's. United still do, for now.

SQ will operate across the pacific, it is a fait a compli.

Bring it on - far better service than the "sense of entitlement" dished out in a Qantas cabin.

[swh]

stable approach,

Thank you for correcting me, checked the schedules I was wrong about JFK also, that is done with a 744 with one stop, apparently the A345 does SIN direct New York(EWR - Newark Intl). SQ22/SQ21, and LAX direct with SQ20/19 with teh A345.

:ok:

[longjohn]

Why should SQ be given access to the US from OZ? Will it provide employment for Australians (or North Americans)? Will it inject revenue into the Australian economy? Will it promote Australia as a tourist destination?

Whilst I agree Qantas have been milking pax on this route for some time, surely then if it is so profitable then another US (or Australian) carrier would ply the route.

Why should the Australian government promote the export of Australian jobs? If Singapore want to opertate the route then make them employ Australains to operate it........

In all likelihood, the arrival of SQ on the LAX route will signal the end of United on the route, not a reduction in QF services as predicted. QF will most likey improve service standards and some frequencies in response whilst poor old United will finally fade off the Pacific.

How very sad.

[Lead Balloon]

In regard to increasing Australia's popularity as a tourist destination. I remember hearing not too long ago that due to the load factors on the route tourists were being discouraged from flying to Australia. So tourism industry suffers, but Qantas shareholders prosper.

Someone always pays when you restrict trade.

[Johhny Utah]

Given that SQ already operate from Singapore itself through to LA, I don't see that they have much to support their argument to operate SYD - LAX. If it simply wasn't possible for them to operate in the manner in which they do now, then they may have a case to build an argument around.

However, as it stands, and as others have pointed out, SQ opersting SYD-LAX is no more than a cherry picking exercise, with the vast majority of all the profits made on the route to flow back into the coffers in Singapore . Not to mention the lack of any real gain for Autralia in terms of flow on benefits from having an 'open skies' arrangement with Singapore...:rolleyes:

[Lodown]

Re: Cherry picking.

Does any free-enterprise, capitalist-run airline run at a deliberate long term loss on any route? Don't they all cherry pick to some extent?

Jetstar Asia has been dabbling in SQ's markets. Perhaps it's time for SQ to dabble in Qantas' markets.

The difference between a domestic and international marketplace is not so clear cut anymore in terms of operations. The reasoning behind traditional market protection was protection of national interest. I believe it is now more in the national interest to open the market up.

I like the prospect of being able to fly Virgin and having my bags checked through onto SQ if that becomes a possibility. More choice for the consumer.

[Kaptin M]

I wonder if SQ want to go this alone, or whether they're considering a codeshare operation with another American carrier - or Virgin?

[Crusty Demon]

Air NZ also has the rights to fly from Aus to the US but stopped a year or two back.

From my understanding, Singair as a 1st preference would like to do this flying in their own right ie Sin-Syd-LA etc.

As an aside, why is everyone so keen to get Singapore on this route? They already have a competitive advantage with the way things work in their own country, so why let them take the icing off the cake for our carriers?

The more competition there is on the route, the less attractive it becomes for someone else, say Virgin, to enter the market to the states. For young people starting out in GA nowadays, they really only aspire to Qantas, Virgin or Jetstar. How many actually get a gig with Singapore Airlines on conditions that match those in Australia. Why do we want to create employment opportunities for foreigners that takes away opportunities from our own?

How will young FA's advance when Singapore flies this route with their own for which their labour laws allow them to employ on a somewhat discriminatory basis compared to our labour laws? Do they pay their FA's, maintenance people and others in Singapore who will be doing the majority of the work compared to here in Aus? It is not just pilots who will get shorted with this deal, but Flight Attendants, engineers and many others who would be employed on a much greater scale if the airline was to be based in Australia, not just fly through here enroute to the states.

As for Singapore Airlines, they get preferential treatment out of Singapore it would appear. How many other carriers get stuck at lower levels, get held short of the main taxyway for several minutes until the Singair starts and gets number 1 position at the holding point. Their system, along with those of many other countries looks after their own national carrier first, others second, while here in Australia (and NZ) we take a much fairer approach. What has Singapore got to offer the rest of Australia's carriers if this deal goes ahead? What do we get out of it?

All up, it won't just be Qantas people who lose out if this deal goes through, but the Australian working public as a whole.

[Don Esson]

Only red ink. They will not do anything to lower fares as they just want to profit and plunder.

The latest stats on the Dept of Transport website are for September 2004. Inbound to Oz, they say that QF had a load factor of 70.1% with UAL having a reported load factor of 78.8%. Outbound, the numbers are 74.9% and 84.5% respectively. So both carriers are operating with q lot of empty seats. Sure in peak periods the numbers increase to nearly 100% but generally Sept would be indicative of the year round experience. The numbers show a healthy increase over the previous year but it is still recovering from 911 and the poor US economy.

And we can't think that the route is a monopoly for Qantas - United in all its bulk is still there. Air Pacific, Air New Zealand, Air Canada and Hawaiian all offer direct services to Nth America and they will be joined by Air Tahiti Niue in the next few months. Finally, the bottom feeders like Korean, Asiana, EVA, China Airlines and some other Asian carriers are carting the price conscious market via Asoia to connect with their many services to/from nth America. With all that is available, what really can SQ add?

The argument that QF through JetStar Asia is also specious. We could offset that by saying that SQ has a significant interest in Virgin Atlantic which has just started operations to Oz so the score is one each!! The impact that VS has on the Australian markert will be more significant than the puny impact of Jet*Asia will have in WSSS.

It will be a tragedy for Australia if Canberra gives in to the parasites that are SQ, and any other carrier that offers Australia so little in return. Let us learn the lessons from being overly generous to Emirates. At the risk of being cynical, may I ask if the bureaucrats in Canberra are paid performance bonuses by 'resolving' outstanding issues such as the SQ claim for traffic rights on the Pacific?

[ftrplt]

Crusty Demon,

you forgot the 360 deg orbit below 10000ft to mysteriously find yourself behind an SQ, or the vector to 40nm final again putting you behind SQ.

Also like the SQ flights that arrive on the departure runway holding up departures for 10 mins or so (including waiting for the SQ training flight doing circuits)

[SKYCAMEL]

I say, bring on Virgin Pacific !!:ok:

[Gnadenburg]

Maybe QF ( through media liasons ) should rehash rumours of the extent of Singaporian military and economic espionage against Australia.

[pictues01]

Also heard there is a possibility that the A340-500 will provide extra flights non-stop SIN-YVR

[wakpilot]

The 8 340's on the book's..whose books because they are not on CASA's list...is this just wishful thinking of some more LH jobs opening up?..also what about the 'guys from the gulf' and their plans to fly out of BNE???

[knackeredII]

I have to take you guys on who reckon that SQ a/c get preferential treatment from ATC into SIN. This is quite simply RUBBISH. You are living in dreamland! There is a absolutely nothing to back up your assertions but your own vivid imaginations. I can assure you that the average SQ pilot often feels aggrieved that he doen't get some sort of preferential treatment, given what goes in China, Thailand etc.After many years of flying in and out of SIN, I have never seen or received any preference given by SIN ATC, BUT I have many time been with pilots who thought they were being given the run around, when in actual fact it was obvious it was just not the case. I have always found SIN ATC to very fair, much more so than most other centres in the region.

Why don't you start behaving like the mature professionals you claim to be.

End of monologue!

[Omark44]

You beat me to it. Whole heartedly agree that SIA don't get any favours from Changi ATC and anyone that thinks they do should make the time for an ATC visit and see the system in operation.
It is quite impartial and training aircraft have no priority at all, they are radar vectored out of the way of arrivals and departures .
Singapore's own airspace is very, very small and controlled by the tower! The levels allocated are as per an agreement between Singapore, Malaysia, Vietnam and Indonesia and these countries TELL Singapore what levels they will accept their traffic at. Changi operate a totally non-partisan slot system to achieve separation based on the published schedule and the time the aircraft calls for it's clearance.
Very rarely does a landing aircraft get the TO runway but we all like to minimise taxying if possible and there is no harm in asking. If you think you are hard done by at Changi just try getting RW25L at LAX next time you are an inbound freighter for the ICC! You wont, simple as that, it 'belongs' to United and AA, you will get 24R and then spend thirty minutes plus taxying across the active runways, going from the NE corner of the field to the SW corner.
There may well be a lot wrong with SIA and Singapore in general but when it comes to ATC they run a very fair and tight ship.

[star gold]

As a pax that travels a lot on SQ I would have to agree with previous posts that SQ doesn't get preferential treatment in Singapore. I have had plenty of arrivals onto 02L ? then backtrack past terminal 1 and 3, then over the overpass and down to an F gate or even one of the middle E gates. I have even done one of ftrplt's orbits in an SQ 777 between Batam and Singapore (quite a spectacular view of those Indonesian islands at low level). On a recent evening departure to BNE what did we have to give way to, QF52 (recognised as a QF 743) which is due in BNE at about same time. That really stings when you get to BNE as SQ are always allocated a far gate for the arriving am flight. You can arrive before QF or JL but still be later to immigration.