View Full Version : Jet* Asia to merge..

25th Jul 2005, 08:26
Singapore based discount carriers Valuair and Jetstar Asia have agreed to combine their operations in the first merger of its kind among the 16 low cost carriers in the region.

Valuair and Jetstar Asia have announced the formation of a new Singaporean company that will own and operate both airlines. Jetstar Asia, which Qantas Airways owns 49 per cent, will therefore operate under the same holding company as Valuair according to a joint statement released by the airlines.

The statement did not provide any information regarding the carrier's financial details or stakes held by Qantas.

In the last two years, 16 low fare carriers have begun flying in the Asian region, where competition is becoming particularly intense among global airlines which may produce an industry loss of $6 billion this year.

Government bodies in Singapore and India , where most of the region's discount airlines are based, are urging the industry to combine to survive the competition as jet fuel prices surge to record levels.

Valuair and Jetstar Asia's merger is said to have been exacerbated by the Indonesian government's rejection last month of Jetstar Asia and Tiger Airways plans to fly into the country, a decision to protect national carrier Garuda Indonesia.

Bloomberg Asia reported that with the establishment of more budget carriers in China and India combined with the recent ban, it has pushed Tiger, Jetstar and Valuair to seek alliances.

In the joint statement, citing Qantas Chief Executive Officer Geoff Dixon who will chair the new holding company, the carriers will “operate in their own right for the foreseeable future, with little or no change to the service offered by either airline”.

Mr Dixon said both airlines would be well placed to participate in growth opportunities within the region.

Jetstar Asia's Chief Executive Ken Ryan has been named CEO, and will manage both airlines.

25th Jul 2005, 08:49
I suppose this will mean the end of Valuair's plans to fly to Sydney.

25th Jul 2005, 23:49
Probably will stop the Perth flights too. Tech crew friends in Valuair told me they have been getting poor loads since SIA dropped their fares to $ 288 SGD return on the B777.

Lucky for Valuair I'd say! Understand they were in real financial trouble and the merger was probably their last chance.

Hope the crew survive the mergers without redundancies...


27th Jul 2005, 05:44
Not sure what the merger will do except create something for Qantas to pour a bucket of money into.

The Valuair route network is smaller than the J* A network - it has Perth and Jakarta which J* does not. Would QF allow the new carrier to compete against itself out of PER? In years not so long ago, QF itself has flown Jakarta-Singapore and Denpasar-Singapore using its own 767s with Australian traffic rights. Not quite as good a frequency as they might offer with J* A320s, but a daily service between CGK and SIN is still valuable, and it can feed QF/BA services north of SIN to Europe etc.

QF has also flown SINBOM with its own 767s and 743s. J*A has just announced its own service to Kolkata ( Calcutta). I hope they enjoy flying to India, because the route is about to become swamped with flights operated by Air Sahara and Jet Airways. Singapore Airlines already flies to Kolkata and they have shown they will match the fares offered by any LCC.

It is not Singapore's fault if LCCs do not get all the routes they want. Asia is not one market like the EU or one country like USA or Australia. A Singapore based airline can only fly to another country if it suits that country.

27th Jul 2005, 10:48
The two companys will continue to operate as Jet*Asia and Valuair respectively, it is pretty much only the internal part of the company that will merge, no pilot jobs lost. Good news all round i guess.

27th Jul 2005, 21:11
The slow motion train crash continues. QF have absolutely zero competitive advantage in Asia that I can think of. All so Dixon can be a "Chairman" in his own right.

27th Jul 2005, 23:26

QF has a number competitive advantages, its profitable, and more profitable than most in Asia including SQ and CX.

Also the QF brand is still associated with being safe, SQ is seen as good, however if you ask most they do have reservations on local crews.

QF also has a number of behind the scenes business and engineering practices which give it commercial advantages, which most national airlines in the area don’t have for lack or resources or know how or both.

The Chinese in particular have long memories, SQ 744 in TPE, Silk Air nose dive, in order from highest fatal accident rate to lowest is this for Asia and Australia... QF does not appear on the list, as their fatal rate is zero.

China Airlines
Air India
Korean Air
Pakistan International
Indian Airlines
Philippine Airlines
Garuda Indonesia
Thai Airways International
Japan Airlines
SilkAir/Singapore Airlines
Malaysia Airlines
Cathay Pacific
Air New Zealand
All Nippon[/list=1]

SQ in its own right is struggling to find its identity at the moment, Singapore as a nation does not have the local population to justify such a large international airline. With the trend towards ultra long range aircraft and routes, there will be no need for a fuel stop in Singapore for many airlines in the future.

CX is sound, it has approximately 1/3 of the world population within 3 hours of its main base, it will never run out of work.

As no open skies agreement exists in Asia, a single national carrier in one location cannot dominate, if you wanted to dominate, you would need to have a brand name that has an AOC in each major centre.

Only company that is doing so is Air Asia, however they are bleeding heavily on international routes with their old equipment, and inability to get cheap fuel as they just done have the volumes or hedging. I understand they have delayed new equipment as they are running out of cash.


Sheep Guts
28th Jul 2005, 01:24
How does CX get on that list SWH?

Was when they had that fatal Hijacking on a flight to Macau in the Fifties?

Qantas may be not on that list, but if you ever talk to Airort personnel at Bankok International Airport they sure remmember Qantas and the Kangaroo tail and not because of an inherent safety concious Airline either :rolleyes:

More than likely a certain parking position of a 747 in a golf course a few years back has tainted their memories of the White Rat.


P.S. It all comes out in the wash SWH no one is Squeaky clean in aviation anywhere.

404 Titan
28th Jul 2005, 01:54
Sheep Guts

We lost a Convair 880 in the early seventies due to a bomb on board. The stats that SWH has quoted are accidents that caused fatalities so in essence they are correct. If one wants to really be pedantic one should look at the cause of the accidents. This would give a more accurate indication of an airlines safety culture.

28th Jul 2005, 02:55
Does this also mean that Qantas will get access to more crew, who will be happy just to have a job, that they can "consolidate" by rostering in other locations around the world?

28th Jul 2005, 03:36
It has been reported on other Pprune threads and written about in books that QF has had fatal accidents.

They have not had any fatalities since becomming an all jet airline.

28th Jul 2005, 04:16
Interesting use of statistics above:

CX: 5 hull losses, 140 fatalities, last hull loss 1972
QF: 13 hull losses, 29 fatalities, last hull loss 1960

(Note: 2 of CXs hull losses were hijacking/terrorism & 1 was shot down by a chinese fighter plane. Those 3 accounting for 116 of the 140 total fatalities)

QF & its "we've never crashed record" well, a steadfast inability to look the facts squarely in face will surely see you through!

I (we) say again.....Karma! Be very careful what you boast about.

Lies, damn lies and statistics!

28th Jul 2005, 06:56
swh ,

more profitable than most in Asia including SQ and CX

would like to know the source of your figures on this one, SQ's last year profits amounted to close to AUD 1billion, and I can't think of any position there which pays more than the equivalent position in QF.

if you ask most they do have reservations on local crews

'most' of who? A common misconception. There are some excellent local crew, although standards of course do vary with so many expats. The assumption is that QF standards are above criricism.

Singapore as a nation does not have the local population to justify such a large international airline

That's the whole point of SQ! It doesn't need to rely on the local population, although it does have some risk when it comes to overflights. SQ is he largest airline in Asia, bar none, the largest operator in the world of B777s. If you want to be truly objective, just sit down and list SQ's destinations and compare them with Qantas', much more diverse.

Only company that is doing so is Air Asia

Air Asia has been successful in its home market of Malaysia and despite its attempts to present this as an international success, this hasn't yet happened beyond its home borders. So not a good example.

Maybe a little more objectivity and less bias would be more helpful.

Sheep Guts
28th Jul 2005, 13:46
Thats interesting reading you have there. Which highlights another problem with SWHs list if Cathays fatalities were 116 surely Air New Zealand Erebus Crash DC-10 with over 200 pax would put them ahead of CX on that list maybe others.

But that is indeed a tough call.


28th Jul 2005, 15:31

The source for that info comes from a fairly recent articles in the Singapore papers that I received from media monitors. The articles were about QF, SQ, silk, tiger, jetstar, and valueair.

"SQ's last year profits amounted to close to AUD 1billion"

Arr..yes true grasshopper...however not all the profit were derived from earnings in SQ, SQ owns 50% of another little airline that IS profitable, and is nice to work for, called Virgin Atlantic...

Also profitable has a number of meanings…to some, mainly those banking and stock market types it’s the rate of return, not the amount of return., e.g. if Airline A returns AUD 1 billion in profit, and has a nett worth of AUD 100 billion, in my view (those banking and stock market types agree) they would be less profitable than Airline B that returns AUD 0.9 billion and have a nett worth of AUD 10 billion.

I know SQ serve a lot of routes ... but you cannot say they don’t practice capacity dumping.... the fare at the moment SIN-PER less than SIN$300 return people have told me, people have also told me thats to capacity dump to match the valueair fare.

I looked at some fares recently to India...for an extra SIN$100 I could have gone to Manchester....Manchester is 2-3 times further away.

"I can't think of any position there which pays more than the equivalent position in QF."

Wages in QF are relative to aircraft size, wages in SQ for crews are about the same across the board for A320, A340, 777, 747. Just the allowances differ.

"SQ is he largest airline in Asia, bar none"

Little airline up the road called Cathay...significant shareholder of Dragon, and have a another outfit called Air Hong Kong...maybe you heard of them, as a combined entity they are actually bigger than SQ and Silk combined. Correct me if I am wrong, Silk is 50% owned by SQ, the rest by the government investment arm ?

The actual number of hulls in the mainline SQ and CX fleets are about the same, I do believe SQ does have more seats in their fleet.

“There are some excellent local crew”

Yes exactly the point I was making…what do you call the local crew that are not in the “some”

“although standards of course do vary with so many expats”

Yes SQ expats are nothing but industrial mercenaries…with a minimum hours for direct entry commanders in SQ they only employed because they are needed, they are not wanted. When you employ a 55 year old ex BA 747 captain on a 5 year contract, you get a person that is very set in their ways.

“The assumption is that QF standards are above criricism.”

They are not, and have been independently audited to say they are not worlds best practice.

“Maybe a little more objectivity and less bias would be more helpful.”

That would imply that you have made an assumption that I work for either SQ or QF.

Sheep ..

NZ has done about 300,000 more flights than CX, its the ratio of the number of events over the number of flights, the body count does not come into it.