Qantas Ownership Cap

[1279shp]

June 20, 2005
Australia is reconsidering a foreign ownership cap on Qantas Airways and is still considering access for Singapore Airlines to the lucrative Sydney-Los Angeles route under a government aviation policy review.

The review, being led by Deputy Prime Minister John Anderson, is due to be completed in a "few weeks", a spokesman for Anderson said on Monday.

Trade Minister Mark Vaile signalled his support for a removal of the 49 percent foreign ownership cap on Qantas when he told the Australian newspaper on Monday he would back a merger between Australia's largest airline and Singapore Airlines.

"My view is if (a merger) could occur then the government should not rule that out... Quite frankly, that is the direction that international aviation is moving in," Vaile said. A spokesman for Vaile said his comments were accurate.

Qantas has repeatedly asked for increased foreign ownership to allow the airline greater access to foreign capital, but Prime Minister John Howard's conservative government has so far resisted those calls.

A spokesman for Singapore Air described the merger proposal as "interesting".

"Both companies are publicly listed companies and the matter would, therefore, be extremely complex and would raise competition issues," the spokesman said.

A spokeswoman for Qantas said there were no plans on the table for consideration.

"We understand the minister was talking about a hypothetical situation," she said. "Consolidation is already happening in other areas of the world and we support moves to allow consolidation in this region."

The aviation policy review is also considering granting Singapore Airlines access to the Sydney-Los Angeles route.

Anderson said last Wednesday the time was not right for Singapore Air to be given access to the route. Then on Thursday he said access for Singapore Air would be reconsidered in a few weeks.

"The Australian government will undertake further work over the next few weeks on its implications for Australian carriers before considering the matter again," Anderson said.

Singapore Air had described the Australian government's comments as a further delay, not an outright rejection, of its bid to fly the Sydney-Los Angeles route.

"Singapore Airlines will not be deterred from its efforts to provide competition for consumers to Qantas on the Transpacific route between Australia and the USA," the company spokesman said on Monday.

Qantas and bankrupt US carrier United Airlines are the only two airlines offering direct flights from Australia to the mainland United States. Discount carrier Virgin Blue also wants access to the route.

(Reuters)

[TIMMEEEE]

Although Singapore Airlines have denied wanting part of QF, this article shows how 48 hours is a long time in aviation.

These guys know that if the rules are relaxed and they do not do their preparation and due diligence, they just may miss out.

Singapore Airlines warms to Qantas merger
7:45 PM June 22

Singapore Airlines said a merger with Qantas was an "interesting idea", following Prime Minister John Howard's comments that increased speculation about a potential tie-up.

Two days after expressing little interest in merging with its Australian rival, Singapore Airlines also said industry consolidation was "logical" although it continued to emphasise such reforms remained a long way off.

"In theory, consolidation and rationalisation in the airline industry will be logical, but the regulatory framework in which the international airline industry operates is not ready," Singapore Airlines spokesman Stephen Forshaw said in an emailed statement to AFP.

"A merger between Singapore Airlines and Qantas is an interesting idea, but very complex one.

"Both companies are publicly listed entities and there would be many issues to be addressed.

"Reforms of this sort need to be global and will take a long time."

In the meantime, Mr Forshaw said Singapore Airlines should be given its long-awaited opportunity to compete with Qantas on the lucrative Australia-US route.

"Consumers and the tourism industry shouldn't be waiting indefinitely for their concerns about competition on the trans-Pacific route to be addressed," he said.

Mr Howard raised the prospect of a merger between the two airlines when he was asked about Australia's refusal last week to grant Singapore Airlines access to the Australia-US route.

He said the decision was not final but could not be reviewed in the short-term as the Government was examining factors that would impact on its overall transport policy.

He said these factors included "the question of whether Singapore Airlines and Qantas were to remain as separate companies for an indefinite period of time".

"This is a decision that's got to be taken in the context of all of those circumstances but the idea that we have shut the door permanently on some kind of accommodation in relation to Singapore Airlines is not correct," he said.