Singapore could call Qantas its own

[Wirraway]

Sun "The Sun-Herald"

Singapore could call Qantas its own
By Phillip Hudson
February 6, 2005
The Sun-Herald

Air fares to the United States could tumble under a secret proposal to allow Qantas to increase its level of foreign ownership and give its rival Singapore Airlines greater access to Australia.

The move to allow Singapore Airlines to carry passengers on Qantas's highly profitable route to the US would signal a dramatic shift in Australia's aviation market and could lead to a price war between airlines.

At least four Federal Government ministers are pressing the case for Singapore Airlines, saying that tourism and business are suffering because of a lack of competition and available flights on the Pacific route.

Industry Minister Ian Macfarlane, Tourism Minister Fran Bailey, Foreign Affairs Minister Alexander Downer and Trade Minister Mark Vaile are among those who are sympathetic to removing restrictions for Singapore Airlines.

Transport Minister John Anderson previously blocked moves by Singapore Airlines, saying the industry was too volatile after the New York and Bali terrorist attacks and the Iraq war. His spokesman said yesterday Mr Anderson had an open mind on the issue.

Only Qantas and United Airlines provide a regular service from Australia to the US. The ministers say there are not enough flights or seats, especially after the signing of the Free Trade Agreement with the US.

Despite Qantas being the most profitable airline in the world, the ministers also want to make sure it does not face unfair competition. One option is to make regulatory concessions and ease the 49 per cent cap on foreign ownership so it can get access to foreign capital. But this could be politically dangerous. Kim Beazley, when finance minister, set the limit to stop Qantas from becoming foreign owned.

Cabinet previously rejected a proposal to change foreign ownership rules because some ministers feared that, unless there was bipartisan support, the public would not believe the Government's promise to restrict foreign ownership on the Telstra sale.

Singapore's Prime Minister, Lee Hsien Loong, last week raised the issue of greater access during a meeting with Prime Minister John Howard.

Qantas chief Geoff Dixon is using his influence in government circles to stop the proposal.

Mr Anderson will meet Singapore's Transport Minister Yeo Cheow Tong on February 14 to discuss the issue.

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

[sport]

Singapore might not call Qantas its own but Qantas might call Singapore Home, very soon.

It is being whispered that Qantas have signed an agreement to send 747-400 heavy maint. to SASCO in the very near future.

This can only be good for Australian Engineering and will keep them in a job fixing up all the stuff ups left after these budget overhauls.

[blueloo]

Having seen SASCOs workmanship first hand, straight after a service, I can only say I feel sorry for the travelling public.

With the amout of things broken after the service, it is the first time I have only thought we would spear off the runway on takeoff or have a significantly greater chance of major malfunction.

It was not good.

[Feather #3]

From my experience with SASCO, it should about double the cost of a D/E Check. This would be hidden, of course, because it would end up in the Line Maint. budget, not Heavy.

When will they ever learn? [good name for a song that]

Cheers ;)

This thought bought to you by the same investigative group who looking at leasing SIA B744's, only to find they were P&W powered; about 3,000+ QF employees could have told them that before they even left Oz shores.

[jetblues]

What gives SIA the right to be at the front of the queue for new OZ-USA services anyway ?

Why could it not be Emirates, Thai, Malaysian or even VIRGIN PACIFIC ?

The "Minister for Qantas" Mr A strikes again ! Geez Dixons got him wrapped around his finger.....

[Ron & Edna Johns]

jetblues - exactly!

The reality is SQ is looking to the future when the need for aircraft to stopover in SIN may well be greatly diminished and hence SQ's relevance will be diminished. It needs to branch out and establish new routes, now. And it is targetting the perceived easy pickings, such as Australia.

Well, if it happens, I fully expect QF will get 5th Freedom rights on sectors such as SIN-HKG, SIN-SHA, SIN-NRT or even SIN-DXB, yes? That'd be only fair and open, yes? QF could certainly make a buck or two... at SQ's expense!

Incidentally, what have the Americans, especially Untied, got to say about SQ moving onto the US-Aus route?

[Wirraway]

crikey.com.au

More Qantas spin on foreign ownership
By Pemberton Strong
06 February 2005

The Australian Financial Review, the Packer Media empire, Federal Transport Minister John Anderson, not to mention commentators in and around the media and business, have been enlisted in the various campaigns over the past couple of years to attack Virgin Blue, the unions, Singapore Airlines and anyone who takes a view contrary to the prevailing Qantas view of the world.

Currently all stops are out to try and defeat Singapore Airlines’ attempts to gain a share of the lucrative Australia-US route. Domestically Qantas has nothing to worry about. That arch duopolist, Chris Corrigan, is doing his bit to reduce competitive pressures by launching a bid for control of Virgin Blue and neutralise the Virgin Blue management and its CEO, Brett Godfrey.

Now, in the Fairfax Sunday papers today, news of a new tack from Qantas to try and stop Singapore Airlines, with Qantas' most important policy objective thrown in for good measure as a bonus.

The story fails to recognise what Qantas is on about and its true objective. The airline spent most of 2003 and early 2004 trying to get the Federal Government to relax or lift the limit of 49.9% on foreign shareholdings.

It is the one change that the Qantas board really wants because it claims it could gain much needed flexibility.

Flexibility for what given that Qantas is one of the world's most profitable and efficient full service airlines, despite being at the bottom of the world and operating a point to point business and not a hub and spoke model with its supposed greater efficiencies.

The hand of Qantas lobbying chief, David Hawes is behind this story and the mention of Foreign Minister Alexander Downer, Trade Minister Mark Vaille, Industry Ian Minister Macfarlane and Tourism Minister Fran Bailey.

The clue is in the linking of the worries about not giving Singapore enough access to the Qantas foreign shareholding limit.

The two issues are separate and not linked. Perhaps the quartet of ministers and John Anderson have forgotten this quote from Federal Treasurer Peter Costello last year on this very issue.

"Well, Qantas at the moment, ever since it was privatised from being a Government -owned airline has had a restriction on foreign shareholding. That is, it has to have a majority Australian shareholding. And Qantas wanted that restriction lifted so that it could become a foreign-owned airline. The Government had a look at that yesterday. We discussed it. We didn't think that the case had been made out. Qantas is an Australian icon, it has always had a majority ownership from Australia. We thought it was right that that continue. And we weren't convinced that there was an economic case that said Qantas couldn't be a successful airline while still retaining majority Australian ownership. And that is why we decided not to change things."

Check out the full interview transcript here.

Quite strong, and seeing the Treasurer is the key minister on these matters, especially the relevant act (as he is on all foreign investment matters) do you think there'd be a change. And would Prime Minister Howard risk trying to stick it up his Treasurer and Deputy on an issue like this when the more important issue of whether to greenlight the Xstrata bid for WMC Resources is around the corner?

Nice try Qantas, Dave Hawes and others. You’ll try anything to limit competition, from anywhere!

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

[ditzyboy]

Ron and Edna -
Over the last 5 or so years QF has axed a number of intra-Asian routes where they had full fifth freedom rights. The most recent being SIN-CGK, SIN-HKG, SIN-DPS. Others include SIN-KUL, SIN-BKK, and BKK-HKG.

With their cost structure they are very hard to make money on.

[fartsock]

Hi Ditzy.

I didn't realise that Jetstar Aust flight atts had access to the cost / yield data for intra asian destinations. I would be grateful if you could e-mail them, or post them here for consideration by PPrune members.

Or could it be that you have fallen for the company propaganda line about mainline legacy cost structures. Have a look at recent posts by QFInsider to find out whats really happening with mainline subsidys of JQ, AO and JQ Asia.

Have you operated on any of these routes ???? No I didn't think so.

Have you spoken to the manager, Singapore about these routes ?.. Once again I didn't think so.

Wake up and smell the coffee, my friend. We are all getting screwed.

[Agent Mulder]

No,

we are are not all being screwed.

If this mob and JQ Asia strart operating over routes previously operated by QF then it is important that every QF MAINLINE pilot makes it known to potential passengers that the Pilots FLYING THE AEROPLANE ARE NOT QANTAS PILOTS! THEY HAVE NEVER PASSED A QANTAS COMMAND COURSE AND HAVE NEVER PASSED A QANTAS INDUCTION COURSE.

For the travelling public, these are the bottom dwellers of Australian Aviation. They have never been accepted by a Mainline carrier until Dixon decided to set up an Airline around them. If you think you have QANTAS Pilots at the helm, think again!

God help the public. You are the weakest link. Goodbye!!!!!!!!!

[Oz Ocker]

"QANTAS Pilots at the helm"........"God help the public."

Getcha hands orf it sonny boy.
QANTAS pilots were "at the helm" in Bangkok.
Thousands of flights operate internationally daily without QANTAS pilots "at the helm".

Some of youse guys really do deserve whats comin' your way!

Be seein' youse round!

[Wiley]

Fox, (if I may make so bold as to call you by your first name, Agent M), you say (apparently with some passion):…it is important that every QF MAINLINE pilot makes it known to potential passengers that the Pilots FLYING THE AEROPLANE ARE NOT QANTAS PILOTS! THEY HAVE NEVER PASSED A QANTAS COMMAND COURSE AND HAVE NEVER PASSED A QANTAS INDUCTION COURSE.I really hate to rain on your parade, sunshine, but the sad fact is 99.99% of the travelling public don't give a rotund rodent's rectum whether the pilots up front are space shuttle qualified or bare bones CPLs; only whether their tickets were $10 cheaper than they would have been with carrier 'X' who may employ (pause to adopt awed tone) Qantas MAINLINE pilots.

I think this attitude adopted by some Skippy MAINLINE drivers that they are somehow a special breed, a cut above all other drivers/airframe stems from the QF company indoctrination lectures given in Week One of QF intake training.

No one doubts that to make it into Skippy MAINLINE you have to jump through some serious hoops without getting grass stains on your freshly drycleaned slacks or blazer elbows, but you do yourselves no favours at all making patently silly comments like the one you made above that seem to assume that people outside the industry (or ‘lesser brethren’ inside it) think you are so special that they will willingly entrust their lives to you and only you.

Back in 1989, (are you old enough to remember that year?), the domestic pilots had the same fantasy you still seem to enjoy, imagining that the travelling public would demand that they be flown only by 'the best' - and the travelling public were totally underwhelmed, demanding only that they get from A to B when they wanted to with whomever would fly them.

And so it remains today.

[56P]

As is always the case with you, Wiley, very well said. Who does the tosser think he is??

[Keg]

Wiley, OZ, I think you guys miss the point. Whether QF drivers are the worlds best (we're not but I'm not sure anyone can lay claim to that anyway) is not the issue.

QF advertise the fact (on board magazine, press releases and interviews) that the start ups have all the 'operational excellence for which Qantas is famous for'. It's a company line and whether you guys think it is deserved or not, a world view by the travelling public of QF is that it is 'safe'. What you end up with is the perception that the LCCs ARE QF but just in different colours. You'd be suprised at the reactions I've had from people when discusssing the LCCs when they find out that the drivers aren't 'Qantas' pilots.

Now, I'm not hooking into thier standards at all, they pass the checks which CASA over sight and I observed a sector HTI-SYD a couple of years back and was impressed at the similarities in operation. The real issue is that Joe Public isn't particularly well informed. They think they are getting QF pilots (with all the history and experience that comes with that- deserved or not) and they're not!

I guess at the end of the day, QF trade off a low cost structure on the basis of a reputation built up by what is definately not a low cost training system in mainline that spends a truck load of money on things like on board managers courses, command school, etc, etc, etc.

[Pete Conrad]

Fartsock has a valid point here, lets back up these propaganda quotes with fact.

Agent moulder, not all pilots flying with QF offshoots are the Impulse bottom dwellers you are referring to, we have alot of ex Ansett and other airline experience out and about as well which is a good thing.

To all that take delight in quoting Bangkok and QF 1, were you guys asleep when Virgin ran off the Runway in Darwin? it's a small point, but he who scoffs at another pilots incident could well find him or herself having an incident before too long.

[CallButton]

Keg - I don't think that Wiley and Oz have missed the point. Re-read Mulder's post, he is a tosser.

The QF interview was a joke, the sim ride the same. The only barrier to some pilots who might think about applying to QF is the bull**** psychometric testing and passes in HSC English! Is this really relevent when the applicant has thousands of hours of jet command time?

I understand YOUR point BUT that was not the intent of Mulder's.

[hrundi_v_bakshi]

A pass in HSC english is not such a bad prerequisite. You should see the standard of some of the posts on qrewroom!

[The_Cutest_of_Borg]

Gotta agree there. There is one 744 Capt who digs a hole for himself every time he posts. People find it hard to give credibility to a guy who is lacking the basics in grammar and spelling.. not to mention logic!

[longjohn]

CORRECTION

WRT Jetstar Asia - most of the Captains are current Qantas pilots, albeit former Ansett Captains who have escaped s/o seniority. Some f/o's are also in the same boat. Then lets not forget the cadets.........

Likewise in Jetstar Australia there are a growing number of former Blue Chip Airline pilots, recently, the former Ansett 737 Training Manager (who holds QF seniority) joined Jetstar.

It must be interesting to say the least for these guys to jump back into the left hand seat, for $100k less than they were earning 3 YEARS AGO.

Thats progress I guess

[Karunch]

G'day Longjohn, very interesting indeed. I wonder if they remember the comments they made about the 'underpaid' Vb crews a few years ago!

[Spad]

Agent Mulder referred to bottom dwellers sullying the QF mainline name and Pete Conrad corrects him to say that some of the people aren't bottom dwellers, but true blue, to-be-respected ex-AN pilots who are now fully accredited QF mainline pilots.

Some of us remember how many of the more senior of these ex-AN pilots got to be AN pilots - they were among the pond life that flocked to Australia or came from elsewhere within Australia to gleefully start the deep wound that has since damn near bled Australia pilots' working conditions dry.

Some of these individuals have been heard to crow recently that the promises (or threats) of the 89ers that pond life like them would never get a flying job overseas have proven to be without foundation.

However, the joke is really on the bottom dwellers (and unfortunately, on every other Australian pilot as well) in that the overseas jobs they are taking are proving to be poorly paid and 'enjoying' conditions that are a pale shadow of what was once accepted as a minimum for a professional aviator.

And who do we have to blame for much of this? Look no further than the now 'respected' (by Pete Conrad at least) ex-AN heroes.

[cornholeyo]

Have a little respect and don't try to turn this into an '89 thread. Anyway the heroes that left the country back in '89 aren't helping improve matters are they??? They took the jobs at VB for murf's sake......... :mad:



PS I'll be good.........

[jetblues]

What an absolute load of cr@p to suggest that ALL Jetstar, and VB pilots are "failed QF Applicants". Many I know have CHOSEN not to pursue a gig with the "Skygods" even when offered the opportunity.

It would appear QF's a rather bitter outfit now anyway, too big and too many egos. Dixon's favourite chess game - thats QF !

[Wirraway]

Business Review Weekly

Pacific Storm

Qantas is getting ready for a fight, as Singapore Airlines tries to take a bite of its profitable Pacific route.

The chief executive of Qantas, Geoff Dixon, might well regard Singapore's Transport Minister, Yeo Cheow Tong, as the $130-million man. This is an estimate of how much Qantas profits from the lucrative, protected aviation route between Australia and the United States. When Yeo arrives in Australia in mid-February to push for liberalisation of one of the most profitable routes in the world, he can expect a fight from Qantas.

Competition should lead to improved services and reduced prices, but Qantas, which dominates the Australian-US aviation route, is not going to give up this virtual monopoly without a fight. With an estimated profit margin of about 17% - double that of many other routes - Qantas shareholders will watch the battle closely. On February 14, the Australian and Singaporean governments will meet to discuss "open skies", which could give Singapore Airlines access to the trans-Pacific route.

Although the federal Transport Minister, John Anderson, is not impressed with the tough talk from Qantas and Singapore Airlines, who are promoting their respective positions, he is unlikely to completely scrap this veil of protectionism. The airways will be liberalised, but it probably will not happen immediately and concessions will no doubt be given to Qantas.

As part of the Singapore-Australia Free Trade Agreement signed in July 2003, the countries agreed to conclude an open skies air services agreement when there is "greater stability in the global aviation environment".

Anderson is not keen to pre-empt the talks with the Singaporeans, but his office gave BRW its definition of "stability". "The Government will assess and determine whether the aviation market has sufficiently stabilised in the wake of events like September 11 and Sars, but clearly the concept of stability implies a prolonged period of favourable operating conditions for the global carriers like Qantas and Singapore Airlines."

In addition to Qantas, flights between Australia and the west coast of the US are also flown by United Airlines. Not only is United in a less-competitive position, but the cash-strapped airline is further hampered by being in bankruptcy.

The Australia-US flight costs passengers more per kilometre than other routes that are more competitive. For example, a business class fare from Sydney to Los Angeles (24,104 kilometres return) is about 46¢ per kilometre, while the more competitive Sydney to London route (34,028 kilometres return) is about 30¢ per kilometre. Although the longer the flight the lower the cost, this equation does suggest that there is consumer benefit in aviation competition - a proposition already agreed to by the Singaporean and Australian governments.

According to Citigroup's transport analyst, Jason Smith, the trans-Pacific route represents less than 12% of Qantas's earnings before interest and tax and about 7% of the company's total revenue. Smith says this route is important, but because of recent expansion, in proportional terms, its contribution is diminishing.

Most transport experts believe that an open skies policy is inevitable - it is a question of how long Qantas can keep this profit stream to itself. Ian Thomas, senior consultant at the Centre for Asia-Pacific Aviation, says there are no "technical barriers" to increased competition; the obstacles are political. "Open skies is inevitable, but it depends on how good Qantas has been at lobbying."

Thomas believes that there is now stability in the market and that Qantas has had enough time to build its position for future competition. He concedes, however, that Qantas cannot take full advantage of the rights that Singapore can bestow upon it, due to obstacles with third countries. He is sympathetic to the notion that open skies will benefit Singapore: "A lot of people see this as a lopsided benefit for Singapore."

Thomas argues that with the likelihood of lower fares, Australian consumers will benefit. If Singapore Airlines competes on the Pacific route, Thomas estimates it could have 20-25% of the market within two years. This would come from Qantas's market share (Thomas believes it to be about 80%) and from United Airlines' share.

If Singapore Airlines wins the right to compete with Qantas for passengers to the US, it will no doubt attract the interest of other carriers. Thomas says Emirates would be interested in entering this market.


More competition

Citigroup's Jason Smith predicts that a third airline will enter the trans-Pacific market within the next 12 months. He says one contender could be an entity associated with Virgin Blue. This is complicated, because of Virgin Blue's links with Virgin Atlantic, which in turn is 49%-owned by Singapore Airlines. On January 31, Singapore Airlines told the Singapore Stock Exchange: "Singa-pore Airlines is not in the market for, or considering, any investment in Virgin Blue. Our interest in Australia is very much focused on seeking the right to provide competition to benefit the travelling public between Australia and the USA."

Despite reports that Virgin Blue is exploring trans-Pacific operations, the chief executive of Singapore Airlines, Chew Choon Seng, says his company has not been involved in those deliberations.

Jason Smith's other scenario is a gradual phasing-in of rights to Singapore Airlines. This may start with the right to fly from Brisbane or Melbourne, with a limit on the frequency of flights. Singapore Airlines has said that, ideally, it would like to have at least a daily operation to the US. Smith believes that this will not be provided immediately, nor will there be instant access to the busy Sydney market. He also believes that the Government will help Qantas gain access rights to other countries beyond Singapore.

If Singapore Airlines is not successful in gaining access to Australia in its own right, Smith says it would be interested in the potential Virgin Blue long-haul operation.

This gradual approach is consistent with how the Government provided Emirates with landing rights in Australia. Emirates first sought entry to Australia in the mid-1990s; access and frequency were phased in over time. It started daily flights from Melbourne in 1996, and in May of this year it will have reached its optimum position of twice-daily flights from Sydney.

A compromise makes political sense. It blunts the pressure by Qantas, it is consistent with what has been awarded to other international carriers, and it allows the Government to claim some free-market credentials.

It would be easier for the Government if there was clear evidence that prices will fall as a result of an open skies reform. It is not in Qantas's interests to make this point, and Singapore Airlines has shied away from making any guarantees. Chew says: "Our track record has always been that we would be competitive, but at the end of the day it is not necessarily cheaper but it is an alternative and the consumer decides." The airline clarifies this by saying that it would expect prices to moderate due to competition and become more "proportionate" with the cheaper European flights.

It will take some time to know whether this is enough for Cabinet to recommend the reforms, albeit in a compromised _fashion.

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

[Three Bars]

Statement 1:

... focused on seeking the right to provide competition to benefit the travelling public between Australia and the USA.

Statement 2:

we would be competitive, but at the end of the day it is not necessarily cheaper

So SIA wants to provide competition ... but it will not be cheaper. How is this different to just saying that "we want a piece of Qantas' action"? And how does this benefit Australia?

Of course all the QF bashers on this thread will flock to SIA, a mini-price war will erupt across the Pacific, Qantas' profit on its last money-making route will fall and Qantas will seek bigger pay concessions from its "militant" unions to subsidise the travelling public.

BLOODY FANTASTIC!!!!!

Let's hear it for open skies :yuk: :yuk: :yuk: :yuk:

[Romeo Tango Alpha]

Yeah, who'd leave a B777 captaincy with a major overseas airline paying JUST short of $200k a year to fly A320's for chicken feed?

The ex-AN heroes can have 'em! They can have Vietnam, Taiwan, and all the other backwaters of the world. With our blessing! Someone has to do it!!!!!!!

[Wirraway]

Wed "The Australian"

Support for Singapore's air route bid
Katharine Murphy
February 16, 2005

SINGAPORE Airlines' push to gain access to a lucrative international air route between Australia and the west coast of the US has received cautious support from the Government.

After a meeting last night with Singaporean Transport Minister Yeo Cheow Tong, Industry Minister Ian Macfarlane told The Australian he was prepared to consider the proposal if three conditions were met.

"There would need to be a phased introduction of flights on this route; the capacity brought on the route by Singapore would need to match demand; and Singapore Airlines should not be able to use its big Airbus to compete unfairly against Qantas," he said.

Deputy Prime Minister John Anderson will go to Europe this weekend to try to secure better access for Qantas in the European aviation market. Mr Anderson also held talks on Monday with Mr Yeo.

The entry of Singapore to the trans-Pacific route could lead to increased competition and lower airfares for Australians. But Qantas has significant clout in Canberra, and concerns have been raised about the impact on Australian jobs.

The issue will not go to cabinet for several months, but The Australian understands that several ministers are in favour of the Singaporean proposal provided Qantas can improve its access in other international markets.

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

[Don Esson]

Quote

------------------------------------------------------
"The Australian understands that several ministers are in favour of the Singaporean proposal provided Qantas can improve its access in other international markets."
------------------------------------------------------

It's about time someone in the well paid Canberra bureaucracy told these pr1cks that the Australian Government is responsible for the negotiation of traffic rights for Australian airlines. I am sure that Qantas would love to do the job but they are not in any position to - never have and never will be. And judging by thge noise emanating from Ministers, Qantas would appear to have little influence over what is negotiated, quite often traded for pork barrelling purposes. In other words, traffic rights are often traded/ceded in exchange for market access for something quite unrelated to air services.


:yuk: :yuk: