Open sky policy AUSSIE STYLE

[DEE-DUCK]

Australia is still in the dark ages of open sky policy.. If it was someone coming up against Virgin or poor old Ansett then the government would have no problem... But QF !!! no Chance.
It might take time but the arrogance of QF will take it's toll, the empire WILL collapse, history dictates.


............................................................ .........................................
QANTAS and Singapore Airlines clashed last night over a report claiming Australians pay an average of 17 per cent more per kilometre to fly directly to the US than they do flying to Britain.

As lobbying intensifies in the lead-up to a Cabinet decision next week on Singapore's bid to enter the Pacific market, SIA released a 52-page report by consultants Econtech arguing that lack of competition on direct routes was leading to higher prices and a restricted supply of seats.

Qantas has two-thirds of the market on non-stop routes to the mainland US, although a range of airlines offer one-stop flights through countries including New Zealand, Japan, China and the Pacific islands.

The Econtech report concludes that competition on the Australia-US route would boost passenger numbers by up to 8 per cent, produce cheaper tickets and boost the local tourist economy by $126 million a year.

It found improved choices on the trans-Pacific route would encourage 13,000 additional Australians to travel to the US each year.

The report said fares on Sydney-LA-Sydney averaged $2138 while those on Sydney-London-Sydney cost $2417.

But the LA return flight was 24,146km while a trip to London via Bangkok, Singapore or Hong Kong averaged 31,812km. That translated to 8.9c per kilometre on the LA route and 7.6c on London.

It also claims the percentage of seats filled by paying customers on the LA route is higher at 82 per cent, compared with a 71 per cent average for British routes.

"Fares on the trans-Pacific route are high," SIA spokesman Stephen Forshaw said yesterday. "We see this as a disincentive to traffic growth. A more competitive market will lead to real benefits for tourism and for the travelling public, and this view has been validated by a study conducted by one of Australia's leading economic research firms.

"Even last year, traffic on the Sydney-Los Angeles route grew by only 1.6 per cent against an average across the top 10 routes to and from Australia of 13 per cent."

But Qantas chief financial officer Peter Gregg said the report was based on a misunderstanding of the aviation industry.

Mr Gregg said seats were more expensive on direct trans-Pacific routes because wind and distances meant the volume airlines could carry was restricted.

He accused the SIA report of being selective. It also centred on the Sydney-LA route and ignored Qantas services from Melbourne and Brisbane as well as destinations such as Hawaii.

"The LA-Sydney route is just a small part of the wider picture that we face," Mr Gregg said. "We're competing with carriers, Singapore Airlines among them, that have a greater base benefit to start with than we do.

"They have a 20 per cent corporate tax rate, ours is 30. We have higher labour rates -- we employ 38,000 Australians, they employ a few hundred."

The Cabinet remains split on the Pacific issue and Qantas is lobbying hard against opening the route.

Most observers believe the best SIA will get is some sort of phased-in, restricted access.

Treasurer Peter Costello, Trade Minister Mark Vaile and Tourism Minister Fran Bailey are sympathetic to Singapore's position, while John Howard and Transport Minister John Anderson are understood to favour Qantas.
............................................................ ............................................:hmm:

[Queenslander]

I think if you read the other articles associated with that story, you will find that Singapore Airlines have stopped Qantas from operating to other destinations from Singapore. So now they are crying fowl, how can they, when they do not have an open sky policy with Qantas………….., who is living in the dark ages now…….

[NZLeardriver]

Ahhh remind me again, where is the 49% Qantas-owned JetStar Asia based and flying to?

[Magoodotcom]

Ahhh remind me again, where is the 49% Qantas-owned JetStar Asia based and flying to?

Singapore! Oh, and, who owns the other 51%?

Tamesek Holdings - aka, the Singapore Govt, and J*Asia has absolutely nothing to do with Open Skies, so all-in-all, a pretty silly question there NZLD!

The Aust Govt will probably allow SIA to operate trans-Pacific out of SYD and MEL, especially in light of recent comments by Peter Costello regarding potential benefits to tourism which SIA has picked up and run with. However, it'll never be a level playing field, with SIA's heavily subsidised (i.e. - cheap) workforce and tax concessions. Can't wait for Emirates to want the same; it'll be an even less level playing field then!

At the end of the day, Qantas is a business, and the aim of most, if not all businesses is to make money. The trans-Pacific sector is Qantas's most lucrative, so who can blame them for doing as much as possible to protect it? Don't condemn them for charging what the market will bare...if people keep paying it, then why drop your prices? Wake up and smell the Avtur folks!

Magoo:ok:

[ZFT]

When has there even been any relationship between the price of tickets and distanced travelled in any part of the world?

Airlines aren’t charities, fares are set to maximise returns, if the load factors support the fares, then they can’t be too high.

[sinala1]

Personally I would prefer to see Virgin make an effort to cross the pacfic... Branson has been (possibly incorrectly) quoted as saying a Virgin airline of some form will be launched before the end of this year to make the crossing - be it an extension of Virgin Blue/Pacific Blue, or a new start up...

The main reason I say this is its better for aussies to have australian carriers employing australian citizens paying australian wages promoting australian economic growth etc flying the sectors rather than a foreign carrier taking the profits home with them... Thats my view anyway! :ok:

[RevMan2]

ZFT - agree.

BUT - if you have a virtual monopoly that you want to defend, you set prices until a pain point is reached, which must be below that which would encourage new entrants to the market.

[NZLeardriver]

Not really a silly question Magoodotcom, and it was rhetorical by the way. I also think you will find that Temasek has 19%, not 51.
Im also pretty sure that Qantas pulled out of a lot of their Asia routes as part of their entry to OneWorld.

Dont get me wrong, I would much rather see an Australian owned and crewed airline doing the routes. I just dont find all their excuses that believable. They should be able to charge whatever price the market will support and with a quality product they will have a customer driven monopoly. I think they are scared that SQ will have cheaper tickets and give a much better product.
Who would you rather fly?

[QFRegional]

Qantas always pull the high labour cost story whenever they feel threatened but have no problem crewing their aircraft with off-shore based cabin crew at slave labour rates and conditions.

[pug munter]

Given the dreadful quality of the service on the LA flight if you are a QF passenger, a bit of competition from SQ might improve their game in cattle class.

Next time I might go use the other unadvertised alternative and go via Honolulu and then connect direct to my US destination. It seems a forgotten route and possibly a damn sight better way to get Las Vegas and avoid the American's paranoid attitudes.

Pug

[Magoodotcom]

Next time I need to get to the US East Coast, I think I might give the Air Tahiti Nui run through Papeete to JFK a go. Maybe even spend a couple of days in paradise on the way home!

NZLD - I meant silly in the context of Open Skies - not really relevant to the arguement. I stand corrected on the Tamesek holding, however the remaining 32% is owned by Singapore interests (Tony Chew & FF Wong).

Magoo:ok:

[missy]

ANZ used to fly SYD-LAX. During the downturn following 911 and the demise of Ansett they stopped. Surely they still have the rights and no doubt the Australian Government would see this as a better option than opening the doors to SIA and UAE.

ANZ wet leasing a QFA 744 to fly SYD-LAX daily! Now there's a thought.

[schnauzer]

Never ceases to amaze me the number of Australian's that stand around and applaud loudly and with great passion whilst their countrymen's jobs are disappearing.

Same thing happened when Impulse, Virgin, Jetstar etc came along. These very same people cheered whilst Ozzie staff started the downward sprial of pay and conditions.

Just bizarre behaviour. Bitter, twisted and without logic.

I'm not suggesting for an instant that Qantas don't need to lift their service standards. They do. But I don't want to see an Australian out of a job in favour of someone from ANY other country. I couldn't give a damn about their colour or creed.

This is about OUR OWN BLOODY country, for Gods sake.

You knockers should put more time and effort into attempting somehow to improve standards in your own country rather than continually denigrating it and favouring other countries airlines.

[Chimbu chuckles]

Here, here schnauser...:ugh:

[DEE-DUCK]

As an ex-pat Aussie it's disgusting the way my country is so hypocritical... OPEN SKY POLICY..... What a load of KrAp!!!

Good to see QANTAS promoting a fighting spirit.


..............................................
SYDNEY: Australia has delayed granting Singapore Airlines (SIA) access to the lucrative Australia-US route indefinitely as it prepares for a review of the aviation industry that could remove foreign ownership restrictions on Qantas, a report said Saturday.
The Weekend Australian newspaper said Prime Minister John Howard phoned his Singaporean counterpart Lee Hsien Loong Friday to tell him of the decision, which follows three years of lobbying for SIA access to the route.

SIA had sought to break Qantas Airways' stranglehold on the route, which it estimates is costing Australia more than 90 million US dollars a year in lost tourism revenue.

Qantas makes about 15 percent of its profits from the Australia-Los Angeles route, where it controls about 75 percent of direct flights and United Airlines has the remaining 25 percent.

Australia suspended talks on an open skies deal with Singapore in 2003, saying it wanted to wait until the world aviation market stabilised following a series of shocks caused by SARS, terrorism and the Iraq war.

Instead of treating the issue in isolation, Canberra would now include it in a wide-ranging aviation review that will also consider foreign ownership restrictions on Qantas and foreign airlines' access into Australia, the newspaper reported.

"It's all in the melting pot," a senior minister told the newspaper.

It said SIA was disappointed "but not surprised" at the decision. - AFP/ir

:yuk:

[TIMMEEEE]

Have to agree wholeheartedly with Schnauzer and Chimbu.

It amazes me also that there are those out there that are happy to give away Australian jobs and watch conditions further deteriorate and all in the name of what?.......... an Open Skies Policy??

That itself is a farce especially when SQ is owned by the Singapore govt as well as the Airport to which they pay fees.
SQ dont pay tax on spare parts (QF do), the Singapore govt allows them to fully depreciate aircraft over 3 yrs (as opposed to 10 for QF), they only pay 20% tax (QF pays 30%) etc etc etc.
Hardly fair considering the Singaporeans dont allow QF to operate freely through Singapore as they claim.
They restrict services in some cases that make a twice or thrice weekly service to Europe unworkable.
Paris is a case in point and would be worthwhile on a daily basis but is kyboshed by the Singaporeans in order to protect their own.

Just talk to any expat that has worked in Singapore and see what their thoughts were on trustworthyness.
And who is the first to complain when Qantas is squeezed in the future and require people to pay for their initial endorsements?????

Knock QF if you want but sell your soul to Satan and you become his master.

Now just sit back and watch the foreign ownership rules get relaxed and watch SQ buy a share of QF.

[Australia2]

Great post schauzner !

[The_Cutest_of_Borg]

What are the other countries with Open Skies policies? NZ?

I remember reading years ago that the only countries that endorsed open skies were the one like Singapore and the Netherlands with nothing to lose..... like a domestic network. ( I guess we could probably add the UAE to that list too)

Open skies is a joke. Those who promote it are seeking to cherry pick. When SQ demands the right to fly TVL to POM as part of an Open Skies policy then I will know they are serious. Until then, they can jam it.

[argusmoon]

Open Skies policies are a myth distorted by governments and codeshare arrangements.Singapore realizes the days of the "hub" are drawing to close and are seeking to maximize destinations and revenue.Singapore and open skies...give me a break the joint is smaller than Tasmania and will soon be as relevant in aviation terms.A victim of technology just as Bahrain was.They want everything and offer/provide nothing

[Chimbu chuckles]

Smaller than Tasmania?

Dude it's smaller than Sydney...a lot smaller!!!

But I agree...its been obvious for a fair while that increased range aircraft were going to need Singapore as a tech stop less as time rolls on...They have nothing we need or want...and if they did it wouldn't be made available. Why QF still use the place as a tech stop enroute Europe amazes me when Dubai is the more geographically obvious...or BKK...or KL.

Singapore is redundant...give em the flick!

[404 Titan]

If one looks at a globe of the world as against a flat map and puts a piece of string on Sydney and the other on London, which city do you think the string goes closest to en-route? Singapore or Hong Kong? It’s Hong Kong by a country mile. While it still isn’t possible for any commercial aircraft to go Sydney – London non stop and carry a viable load, they will require a tech stop. Depending on the season I can see Hong Kong, Shanghai and Dubai being much more viable than Singapore. All these en-route destinations offer a unique stop over or final destination experience that frankly Singapore really can’t match.

[captainrats]

Bloody Fantastic

[avion345]

must agree with schnauzer,

if there is to be another carrier on the LAX route, the extra capacity should be offered to an airline based in australia,employing australians!!!

currently trans pacific ex australia, its one aussie carrier verus
air canada/united/air new zealand/hawaian and from
july, air tahiti nuie

so if the govt want any more competition on the pacific they should offer the rights to Virgin!

[Queenslander]

I was under the impression that Virgin Blue was looking at opening the route up, but at the same time I also read that Richard Branson was going to open the route up with a new airline, after PRK took control of Virgin Blue that was what was written in the Australian a few months back.

Question, what is stopping Virgin Atlantic from flying the pacific route, since they now use Sydney?

[Sunfish]

Reading certain posts on this thread demonstrates that pilots are just like everyone else.

When Bunnings starts selling power tools for $99 (made in China) instead of the $300 Australian original, do they walk up to the counter and start yelling "Stop selling this Chinese stuff! They are deliberately underpricing these goods and taking Australian jobs! This is a national scandal! It must be stopped! Australian jobs are at stake here! The evil Chinese will raise the price back to $300 when all Australian power tool manufacturers go under! It's a fiendish Asian plot I tell You!'?

Nope, they just say "Well well! We have a bargain here! I always thought that other Australian stuff was overpriced and now the Chinese have confirmed it for me!" Out comes the Visa card.

When I listen to Schnauser that is exactly what I hear, except we are talking about HIS job.

Schnaus baby, the rest of Australia doesn't care about QF. We suspect you have been milking us for all your worth for years and last years billion dollar profit proves it.

Keep hubbing out of Sydney.

Keep licking political backsides like you have done for years for protection. It should work, after all you have the Packer press behind you.

One day change will occur, and the longer you hold to your wet dream fantasies of controlling the market into and out of Australia, the more difficult and painful the eventual change will become.

Frankly I couldn't give a flying %^&$ about SQ direct to LAX. I prefer Emirates or SQ and break the journey somewhere. The thought of travelling cattle class in a QF A380 makes me want to vomit.

[Chris Higgins]

I really don't see how anyone could do it cheaper than Qantas anyway. Just go to their website and click on North America. They're giving away tickets for less than $900 round trip from LAX as it is. With the price of fuel now, I really don't see how they could make it any cheaper than it is.

[sinala1]

Question, what is stopping Virgin Atlantic from flying the pacific route, since they now use Sydney?

If I understand correctly (open to correction! :O ) the UK does not have the fifth freedom rights required to fly on from australia to the US... as they are a foreign owned carrier, these rights are required...