Triple 7
10th Jun 2005, 04:55
Qantas admits it still faces an uphill battle to turn a profit from its 49 per cent investment in Jetstar Asia, despite the carrier in Singapore having managed to lease out four of its unused Airbus 320s.
Amid growing speculation that Qantas and its fellow shareholders could soon ditch the loss-making airline, Qantas chief financial officer Peter Gregg said: "Its performance has improved but it's not what we hope it to be."
Blaming the carrier's inability to gain access to crucial markets such as Indonesia and China, Mr Gregg said Jetstar Asia's problems stemmed from the carrier "only [having] been given certificates to land between three and four aircraft".
The airline was to have eight aircraft in its fleet by November but, thanks to traffic restrictions, it has been forced to lease four of the Airbus A320s to the Turkish carrier AtlasJet.
It is only eight months since Qantas chief executive Geoff Dixon said the airline was "going to be a very, very substantial airline". At the time, Mr Dixon said: "I can assure you that Jetstar Asia, indeed Jetstar Australia, its sister airline, will be around in three or four years' time."
Advertisement Lately, however, Qantas has failed to provide any clear assurances on how long it will continue to back its struggling Singapore offshoot.
"We always reassess every investment along the way. Our view on life is that we have strategically set out to create with relevant shareholders a Singapore-based aviation company to try and participate in that market," Mr Gregg told the Herald. "Now if we're unable to that … then yeah, we'll look at everything,"
He declined to say how much time Qantas would give Jetstar Asia.
"We are strategic players, we are not venture capitalists; we are people to go for the long run and we look at it for the returns we are trying to achieve for our whole business," he said.
The airline's other investors include the Singapore Government's investment company Temasek Holdings, which is Singapore Airlines' major shareholder.
Mr Gregg also highlighted Jetstar Asia's woes as evidence of a lack of balance in Singapore Airlines' argument for wanting to gain access to the lucrative Sydney to Los Angeles route.
"We've done absolutely everything by the book up there. Yet the countries Singapore has negotiated rights with have denied rights to a legitimate Singaporean-based carrier and there appears to be nothing they are prepared to do about it. Which is mightily amazing for a country demanding access on a route that they don't have a right to."
After talks with the Indonesian Government two weeks ago, Singapore Transport Minister Yeo Cheow Tong said it would be another six months before the governments would review "the issue of low-cost carriers flying to Indonesia".
Amid growing speculation that Qantas and its fellow shareholders could soon ditch the loss-making airline, Qantas chief financial officer Peter Gregg said: "Its performance has improved but it's not what we hope it to be."
Blaming the carrier's inability to gain access to crucial markets such as Indonesia and China, Mr Gregg said Jetstar Asia's problems stemmed from the carrier "only [having] been given certificates to land between three and four aircraft".
The airline was to have eight aircraft in its fleet by November but, thanks to traffic restrictions, it has been forced to lease four of the Airbus A320s to the Turkish carrier AtlasJet.
It is only eight months since Qantas chief executive Geoff Dixon said the airline was "going to be a very, very substantial airline". At the time, Mr Dixon said: "I can assure you that Jetstar Asia, indeed Jetstar Australia, its sister airline, will be around in three or four years' time."
Advertisement Lately, however, Qantas has failed to provide any clear assurances on how long it will continue to back its struggling Singapore offshoot.
"We always reassess every investment along the way. Our view on life is that we have strategically set out to create with relevant shareholders a Singapore-based aviation company to try and participate in that market," Mr Gregg told the Herald. "Now if we're unable to that … then yeah, we'll look at everything,"
He declined to say how much time Qantas would give Jetstar Asia.
"We are strategic players, we are not venture capitalists; we are people to go for the long run and we look at it for the returns we are trying to achieve for our whole business," he said.
The airline's other investors include the Singapore Government's investment company Temasek Holdings, which is Singapore Airlines' major shareholder.
Mr Gregg also highlighted Jetstar Asia's woes as evidence of a lack of balance in Singapore Airlines' argument for wanting to gain access to the lucrative Sydney to Los Angeles route.
"We've done absolutely everything by the book up there. Yet the countries Singapore has negotiated rights with have denied rights to a legitimate Singaporean-based carrier and there appears to be nothing they are prepared to do about it. Which is mightily amazing for a country demanding access on a route that they don't have a right to."
After talks with the Indonesian Government two weeks ago, Singapore Transport Minister Yeo Cheow Tong said it would be another six months before the governments would review "the issue of low-cost carriers flying to Indonesia".