View Full Version : Cheong Choong "Starting new airline viable"

3rd Oct 2002, 16:24
Fri "Sydney Morning Herald"

Singapore toys with prospect of third airline
By Darren Goodsir, Transport Editor
October 4 2002

Singapore Airlines has officially rated as "viable" its proposal to establish a third Australian domestic carrier.

In his first public comments on the Asian carrier's plans since the demise of Ansett, the airline's chief executive, Cheong Choong Kong, declined to reveal a timetable for launching an assault on the congested domestic market, dominated by Qantas and Virgin Blue.

But he hinted the market conditions were ripe for a start-up airline to take a fresh tilt at domestic travellers.

Commenting on his team's recent evaluation of Australian market conditions - and on introducing limited full-service flights to major cities - Dr Cheong said: "The information we gathered showed that starting a new airline is a viable option.

"Whether we exercise that option, and do it, is another thing.

"It depends on various conditions - and whether those conditions will come about remains to be seen.

"We have always been interested in having a permanent presence in Australia ... because the Australian market is extremely important to us.

"And by presence we mean more than just flying more frequencies to the capital cities. I think the point to note is that the game ain't over yet. The fat lady hasn't sung yet."

Last June, Dr Cheong told a meeting of the Star Alliance in Shanghai that the disappearance of Ansett had created a vacuum in international coverage that needed to be remedied.

Since then, Singapore has enjoyed good business on flights in and out of Australia - with loads on many routes better than this time last year.

It has also reached an agreement with Qantas to fly its passengers within Australia.

For the past six months, the airline's Australian-based consultant, Peter Stainlay - a former Qantas executive who helped develop the final route strategy for Ansett Mark II - has been determining if the carrier's good international business can help support the domestic offshoot.

The suggested entry of Singapore Airlines has coincided with Qantas's plans to take a 25 per cent stake in Air New Zealand. It has also come amid speculation Singapore itself may be tempted to buy out the diluted British Airways shareholding in Qantas.

"I can only say that in this funny business, anything is possible - and I wouldn't rule anything out," Dr Cheong said.

"I never comment on talks, or the absence of talks, or who they are held with."

Dr Cheong said exploiting the congested domestic market - including the Sydney-Melbourne-Brisbane crush where securing a seat at short notice often meant a large fare - was an issue which "featured prominently in our study".

"But we won't commit ourselves to a schedule," he said.

"You won't be hearing from us on this subject next week, or maybe even next month - but beyond that, I really honestly can't say."

Dr Cheong said the airline was examining investment opportunities "not confined to just Australia.

"There are developments elsewhere and whether and when we invest in that third Australian airline will depend, among other things, on how developments in other places progress."

Fri "The Australian"

Third airline 'viable'
By Steve Creedy
October 04, 2002

SINGAPORE Airlines executives believe a third domestic carrier is a viable option, confirming yesterday the battle for Australia's skies is far from over.

Singapore chief executive Cheong Choong Kong said the airline was keeping its options open, but warned those options were not confined to Australia.

He would not reveal the alternatives, but said the airline's healthy balance sheet did not mean its resources were unlimited.

"For us there are developments elsewhere – and whether or when we invest in that Australian airline will depend, among other things, on how developments in other places progress," he said in Sydney.

Dr Cheong said high load factors and difficulties getting seats on some routes had featured prominently in the airline's study of the Australian market.

Australia is one of Singapore's biggest overseas markets and the airline has a long-term interest in expanding here.

Its evaluation here included assigning a local executive and a small team from Singapore to look at issues such as domestic airport access.

"The information that we gathered certainly showed that starting a new airline is a viable option," Dr Cheong said.

"Whether we exercise that option and when we do is another thing.

"We're not going to make a decision in a hurry.

"I think the thing to note here is the game ain't over yet, the fat lady hasn't sung."

He did not rule out Singapore Airlines taking a position in Qantas if British Airways sold its stake.

But Dr Cheong said the idea of a wider Australasian grouping of airlines, raised by Qantas chief Geoff Dixon, was "just a concept at present, and very much Geoff Dixon's concept".

Singapore seems to be doing well in the post-Ansett environment despite the collapse of its local partner. Dr Cheong said load factors into and out of Australia were "as good as, if not better than, before".

However, the airline had been affected by the loss of the Ansett frequent-flyer scheme.

It was working hard to build up its Krisflyer frequent flyer scheme and had reached a commercial agreement with Qantas.

"So while we are feeling, to some degree, the loss of Ansett, it hasn't been very severe," he said.

He declined to speculate on what went wrong with Ansett, saying the issue was still too sensitive and shrouded in emotion to comment.

"We are very, very sad that Ansett has gone under and thousands of people have lost their jobs but apart from that, as I say, the game ain't over."

The Singapore boss was also unperturbed by potential competition from Qantas low-cost offshoot Australian Airlines, due to launch this month.

Subsidiary SilkAir had lower costs than mainline airlines and the costs could be brought down further if need be, he said.

Capt Vegemite
3rd Oct 2002, 17:30
Cheech and Chong are gonna start an airline in Australia ?

Far out man.

3rd Oct 2002, 18:04
Cheong Choong Kong ...

Cheong, Choong, Kong ...

Cheong ... Choong ... Kong ...

I don't know anything about the man ... and I don't live in Australia ... but I sure like saying his name.

Say it with me, won't you?

Cheong Choong Kong ...

(South of heaven, west of hell)

3rd Oct 2002, 21:12
I know for a fact that former AN A320 drivers are not getting interviews elsewhere until SQ come clean with there plans. I hope for those guys that this does not drag on and on.

3rd Oct 2002, 23:04
Methinks Ching Choon Chong is playing games. Think about why.

4th Oct 2002, 01:07
Me think Virgin may have to become woman very soon

eisle s
4th Oct 2002, 03:54
I still think that SQ are tightening the screws on QF to give them a better deal with regards to the on-carriage. They threaten to start their own domestic airline and QF relent some what to the price SQ want:confused: Maybe, Maybe NOT?

4th Oct 2002, 08:50
This is from the Strait Times- Singapore

The first part of the Article was very similar to that of the article from the Australian.

Dr Cheong says SIA is keen on having a permanent presence ''because the Australian market is extremely important to us. And by presence, we mean more than just flying more frequencies to the capital cities''.

He declines to say if SIA might invest in Qantas if rival British Airways withdraws from the Australian carrier.

''I can only say that in this funny business, anything is possible and I wouldn't rule out anything,'' he says.

4th Oct 2002, 09:33
The good Doctor Cheong, master of foreign investment for Singapore Airlines.

Confucius say: "Man with moving hands in pocket not necessarily playing with car keys."

Skinny Dog
4th Oct 2002, 13:13
I think it would be wishful thinking for SIA / SilkAir to start any airline here. Choong has proved himself inept at financial management (Virgin Atlantic and Air NZ / Ansett). SilkAir especially, still has an image problem after they 737 dived into the river in Indonesia. The inquiry that followed was carefully controlled with only selective information allowed, hence the controversy will not go away, in Asia.
One incident here in Oz would have this forum and the local media, alight.
Regardless, they are ruthless taskmasters. Any thoughts of a reincarnation of the unrealistic conditions that existed in Ansett is just day dreaming.

4th Oct 2002, 13:36
:rolleyes: :(

4th Oct 2002, 22:47
"Market is ripe for a third party" etc etc
"A third airline is sustainable" etc etc.

Well the Dr has had over twelve months to evaluate, ponder, plan, organise, strategise, theorise and whatever.

The fact that they have not done anything to date after having every opportunity under the sun is testimony to the good Dr's lack of true commitment not to mention his ability to procrastinate.

If he was going to do it then it would have been done.

Why doesnt this very businessman with an extremely average track record over the last 3 years stop playing games (like he did in all of his other loss-making ventures) and do something of substance?

Oh thats right - he cant afford to f*&k up this time around as his neck is in a noose and the other Singair board members are waiting for him to just stuff up a fraction.

Airspeed Ambassador
5th Oct 2002, 01:10
My take on the situation is that Singapore are interested in the Australian domestic market but probably not as a player in its own right. Qantas has a strong grip on the market and Virgin smartly has positioned itself below Qantas with a differentiated product. For all the talk about how Singapore could show Qantas a thing or two about real service, the domestic market pie is only so big and the best Singapore could hope for is a small slice. As small full service carrier priced at or just below Qantas, their position would bring pressure from the other two players from above and below. Not the best place to be and far too risky IMHO.

So, if they are interested in getting their foot in the door, would not the best plan be to talk it up and give everyone the impression that you intend to enter the market, thus pushing down the market value of the two other players (take a look at Qantas's share price currently / Virgin intend to float at some stage). Do this long enough and I predict that Singapore will push for a stake in either Qantas (through BA's 25%) or Virgin Blue (just as in the Virgin Atlantic case). A far easier, less risky and much less expensive way of entering the Australian domestic market.

Only time will tell!


5th Oct 2002, 07:43
Can someone clarify for me .......

When a company like Ansett ceases to operate is it a year after the collapse of the company before you can re-use the name (or purchase) and not be liable for the previous debt?

If this is the case then one would assume that if SIA enters the Aussie market and was to use either part of the Ansett Branding or the whole kit and caboodle then they would need to wait until April. Which is when a start up has been rumoured. The FF survey they completed included a question about the re-use of the Ansett name.

I am not suggesting they will use the Ansett name but is this the case in a business collapse?

5th Oct 2002, 09:48
Good question !!As for the final dates of "Ansett" operating does the time under 'Admin"come into the picture ??

5th Oct 2002, 09:52
skinny dog,

Not sure where your info comes from but its a bit of an untruth to say that MI has an image problem.


Fatal mistake to think that because SQ have not yet moved, they never will. Putting together plans for SQ and VB to jump into bed does not happen overnight.

5th Oct 2002, 10:10

Analysts doubts Singapore Airlines move

Analysts doubt Singapore Airlines will set up shop as Australia's third domestic carrier, saying it is more likely the Asian carrier will try and cultivate an alliance with Qantas Airways Ltd.

Singapore Airlines chief executive officer Dr Cheong Choong Kong today said the Australian airline market was a viable option for Singapore.

"It is viable, it can be viable, but as I said, it depends on so many conditions and one has to see whether those conditions are fulfilled," Dr Cheong said.

Rothschild Australia Asset Management transport analyst Troy Angus said Singapore Airlines might be trying to get Qantas or Virgin to the negotiating table.

"It appears that he is attempting to get either Virgin or Qantas to the table to do a deal with him," he said.

"In terms of the Asia-Pacific region, a Qantas-Singapore strategic alliance would be a very competitive entity in this region, particularly if it came on the back of Qantas doing a deal with Air New Zealand."

Qantas is currently in talks with Air New Zealand about a potential stake in the New Zealand carrier.

Qantas stocks, which have tumbled to year lows on war fears in recent weeks, ended only one cent weaker at $3.50 following the fresh Singapore speculation today.

"The market doesn't believe ... that Singapore will enter the domestic market, or it is already discounted in the share price.

"The truth lies somewhere in between. I suspect that the market may imply perhaps a 10 per cent probability of Singapore entering the domestic market, but not more than that.

"It would cost a ridiculous amount of money and they would be competing head on with the likes of Qantas in a domestic market which is not large enough to support three carriers."

Virgin Blue head of commercial David Huttner dismissed the fresh speculation as "nothing new".

"I can say emphatically there are no discussions between Virgin Blue and Singapore Airlines," Mr Huttner said.

©AAP 2002

5th Oct 2002, 19:26
ching choong chong

ding doong dong

confucious say man who sreep outside and dleam of woman wake up with heavy dew on stomach.

confucious say man who stick dick in cookie jar is f***ing clackers

haaaawwww...... me so HUNG glee...

Al E. Vator
6th Oct 2002, 04:30
......yeah right. Never ceases to amaze me the calibre of morons PPUNE attracts. Are you proud of this post gravy?
Anyhow, back to the sensible posts.................

6th Oct 2002, 05:21
Confucious say: Man on PPUNE [email protected] too much lose abirity to say R!:p

6th Oct 2002, 05:31
Thankyou,Wirraway for your latest news on SQ. I am not surprised but very saddened, because................

now I am going to have to get on the phone and invite some friends over to polish off that case of Crownies in my shed !!!!!!!!

:( :( :D

Boeing Belly
6th Oct 2002, 07:05
I didn't know it was Wirraways' news. I thought it was a copy of a newspaper article, one of thousands, with a comment from an "expert analyst", also one of thousands. This particular article just happens to conform to your point of view, therefore, it is surely factual, true, accurate and without a hint of bias.

luna landing
6th Oct 2002, 10:50
For all the talk of a third airline in Australia, there's not much of
substance on the horizon, says aviation reporter Steve Creedy
THEY seek it here, they seek it there -- but a third entrant to Australia's
domestic airline market is proving more elusive than the Scarlet Pimpernel.
Speculation about a rival to Qantas and Virgin Blue is rarely off the radar
screen, as scraps of information surface or the concept is pushed by various
But the question asked in taxis, at parties and on talkback radio -- Will
the increasingly unpopular airline duopoly be broken? -- remains largely
Like Baroness Orczy's hero of the French Revolution, that damned elusive
third carrier remains a shadowy figure, difficult to pin down and seemingly
impossible to kill off.
Last week, Qantas chief executive Geoff Dixon expressed his fears that
Australia's liberal aviation regime meant a third airline might take off
"at any time''.
"Cherry-picking the most lucrative routes is an obvious starting point for
any entrant,'' he said. "This places constant pressure on incumbents.''
Virgin Blue boss Brett Godfrey also frets about a third carrier as his
discount airline heads towards a partial float next year.
"Our view is there has always been room for a third entrant,'' he said last
month. "There is more than likely to be a move by such a player, I believe,
within the next 18 months -- possibly sooner.''
Yet, whether that third carrier will ever become more than a speculative
speck on the horizon is a question that has split the aviation industry.
Singapore Airlines, headed by Cheong Choong Kong, remains the stand-out
favourite to bust the Qantas-Virgin Blue duopoly, with Air New Zealand and
Emirates also touted as possibles. A few Chinese airlines have been named,
but not with much seriousness.
Singapore and Cheong have a long-standing interest in the Australian market.
Early this year, the airline admitted that establishing a third domestic
carrier was an idea that had crossed its mind. It was a little more specific
in July, confirming that one of its airport services teams had been
investigating domestic access to Australian markets.
While the Singaporeans don't pretend their arrival is imminent, they're not
about to kill the golden goose of high-profile publicity. Simply translated,
their message is: "We're thinking seriously about it.''
It's a message actively pushed by interested parties such as tourism bodies
and the Sydney Airports Corporation (SACL), which would love another
domestic competitor to help fill its newly privatised coffers and help its
argument with Virgin Blue about how the former Ansett terminal should
SACL, which believes the domestic market is capacity constrained under the
duopoly, was quick to comment early last month when a television report
claimed Singapore was going to relaunch Ansett using a fleet of 24 Airbus
The report generated excitement because of the detail involved and its claim
that a proposal to revive the Ansett name would be put to a meeting of the
Singapore Airlines board on September 11.
On both occasions, the Singaporeans sprinkled some water on the speculation
without dousing the fire. The board did meet that week -- although not on
September 11 -- and it's believed to have received a progress report on
But a firm plan is understood to be some time off. And even if the third
airline option is put up, there's no guarantee the board would accept it.
Sources at Singapore denied it had an Australia-bound Airbus fleet waiting
in the wings or that it necessarily wanted to resurrect the Ansett brand,
although the airline admitted it included questions about Ansett in a
regular customer survey.
Yet even if Singapore does decide to take on Qantas and Virgin Blue,
Australia is unlikely to see the kinds of fare wars experienced in
Singapore isn't a discount carrier; it's a full-service airline that prides
itself on an upmarket image and charges accordingly.
Its entry into the market might also see Dixon's cherry-picking fears
realised as it moved to snare well-heeled travellers on trunk routes.
Australia is one of the airline's biggest overseas destination. With 68
weekly flights to five cities, Singapore is the second biggest carrier after
Qantas operating to and from this country.
It's been gradually increasing its Australian presence. Last year, Singapore
hired former Qantas deputy chief executive Peter Stainlay to help it better
exploit the market.
Singapore also has a long history of trying to get a foothold here,
including a failed bid to gain a 25 per cent stake in Qantas, an
unsuccessful attempt to buy 50 per cent of Ansett and its ill-fated 25 per
cent ownership of Air New Zealand-Ansett.
The Ansett collapse 12 months ago left Singapore, along with other airlines
in the giant Star Alliance group, without an Australian feed.
Singapore was hurt less than some of its alliance partners because it
regularly serves every major Australian city. The airline says only a modest
proportion of its passengers travel beyond their initial destination. It's
also cut a deal with Qantas allowing it to offer its passengers domestic
seats at discount rates.
But that discount falls short of the rate it got from Ansett, and partnering
with Qantas leaves Singapore disadvantaged in the packages it can offer to
corporate and other affluent customers.
But it will only move on those well-heeled targets if it can build a
business case that allows it to make money. And so far been no sign the
airline has started the necessary talks with government and regulatory
Analysts believe Singapore is waiting to see what happens with a potential
deal between Qantas and Air New Zealand before it takes matters further.
Rumours have also circulated of a possible Singapore buyout of British
Airways' 21 per cent stake in Qantas, although BA has made no move to sell.
There remain many -- headed by Qantas -- who doubt the market can sustain
three domestic carriers.
As Dixon has pointed out, the industry lost more than $500 million in little
over nine months during the height of the four-airline battle of 2000-2001.
"Even in the largest domestic aviation market in the world, the US, there
are only five major carriers -- two of which have been in, or close to,
chapter 11 bankruptcy protection in recent years,'' he said.
Yet Dixon is preaching to a public more interested in competition and fare
availability than in complicated airline economics.
Despite Qantas's protests to the contrary, many Australians believe the
reversion to a duopoly has made cheap fares harder to get.
A recent Sydney Airport-commissioned survey of 4000 people found almost two
thirds were in favour of an overseas airline entering the Australian market
to compete with Qantas and Virgin Blue.
With that kind of public support, you can bet the third airline rumours will
continue. And one day, they could well prove to be true.

6th Oct 2002, 16:39
thats right, ice.... man...
i AM attracted to P-PUNE... b-but I th-thought it was spelt with T-TWO "O's".....

Al E. Vator
6th Oct 2002, 16:51
oops.......... fogot my R.
Always supises me how many moons ead PPUNE

7th Oct 2002, 00:18
Perhaps there is a game of chinese checkers being played here! :D

7th Oct 2002, 07:10
Never ceases to amaze me the calibre of morons PPUNE attracts.
ALWAYS ceases to amaze me....

7th Oct 2002, 11:26
You've been swinging too many nav bags, gravy!