Singapore still up in the air

[Wirraway]

Tues "The Australian" 22/10/02

Singapore still up in the air
By James McCullough
October 22, 2002

SINGAPORE Airlines is closer to acquiring some of the former Ansett assets, including the coveted Sydney Airport Terminal Two, as part of a push to eventually establish a third airline in Australia.

It is understood Singapore Airlines has dispatched a second team to look at some of Ansett's assets as the group considers its offshore expansion strategy.

A Singapore Airline spokesman would not comment on talk of acquisitions but maintained the establishment of a new airline was viable although it was "one of a number of competing priorities for us".

"We won't be making a decision immediately and we are not in discussions," the spokesman said.

Singapore has been dispatching teams to Sydney to investigate the financial details of acquiring the terminal, owned by Southern Cross Airports Corporation Holdings Ltd with Macquarie Airports as a major shareholder, and it is believed the acquisition is still on the drawing board.

Singapore Airlines deputy chairman and chief executive officer Dr Cheong Choong Kong said information gathered indicated "starting a new airline is a viable option".

Dr Cheong said the airline had sufficient cash flow for new offshore investments and partnerships with other airlines.

"We haven't put a number (on the cash available). Our cash flow forecast will include a number, but it's not a target," he said.

Virgin spokesman David Huttner described talk of Singapore Airlines being interested in Terminal Two as rumours aimed at locking out Virgin Blue.

Virgin, meanwhile, has initiated court proceedings against Southern Cross Airports in the NSW Supreme Court seeking a ruling on the terminal's future.

Virgin believes they had a binding agreement to acquire half of the former Ansett terminal, which has 18 gates in total.

A directions hearing has been completed with another scheduled for the end of the month and a trial date for March next year.

"We plan to get a deal we agreed on in April this year and we have gone to the NSW Supreme Court to do it because we would rather do that than raise the fares to the travelling public," he said.

Sydney Airports spokesman Peter Gibbs would not comment on specific negotiations about the terminal but confirmed Singapore was an interested party.

The terminal is being used by Qantas for its regional and leisure operations, Regional Express, Horizon, Aeropelican and Alliance Airlines. Qantas has also expressed an interest in the terminal.

Sydney Airports yesterday posted first-quarter earnings of $89.5 million, in line with analysts expectations.

[Airtart]

Surely the author of the article meant to say that SQ are looking to acquire terminal space in Terminal 2, I can not imagine that Southern Cross would have put Terminal 2 on the market,
or would they ?:confused:

[AN2002]

If SQ does indeed start up (I hope it does), we can say bye bye to those unprofessional clowns in the sky.

[crocodile redundee]

Singapore is only interested in the terminal bays marked for Concorde parking.

[betedete]

AN2002, excuse my ignorance but who are the unproffessional clowns that you elude to? :confused:

[Casper]

"Those unprofessional clowns in the sky" have already been grounded, some for longer than others!

[Icarus2001]

Whether they elude or allude why are they clowns AN2002 ? Is it the big shoes?

[wot_tha]

Now AN2002 you are being very unfair. Some of us like arriving off an early morning flight to arrive for a buisness meeting with our faces painted in bright colours....kinda takes away the "I've had no sleep look". Not to mention having our ties straightened by some gorgeous blonde......oh sorry I'm mistaken, ties are banned aren't they. Well I guess I could always just turn up in a bomber jacket and a baseball cap, that should impress the general manager !!!

Thankfully performances in the pointy end are maintained to acceptable standards, even if your leader makes you dress like a joke.

I'm with you AN2002, at least Ansett looked the part.....bring on SIA I say.

[AN2002]

I don't care how long SQ take as long as they get AN III right.

[Buster Hyman]

Whilst I share "some" of your sentiments AN2002, I really hope that they don't call it Ansett, if they do get up. Nothing can replace the airline I used to work for, and, IMHO, I'd rather they didn't try.:(

[BlueEagle]

The Chinese are extremely superstitious about anything to do with death, so, with no disrespect intended to any one Ansett, past or present, I think it quite unlikely that SQ would use the name 'Ansett' as such.

[And I'm only referring to the 'death' of an airline here, nothing else.]

[Wirraway]

Reuters

Saturday October 26, 4:12 AM
Singapore Airlines says United seeking cooperation
By Julie MacIntosh

NEW YORK (Reuters) - United Airlines, which is teetering near the edge of bankruptcy, has approached its air alliance partners, including Singapore Airlines Ltd., about strengthening ties between the carriers, Singapore Airlines' chief executive said on Friday.

"United Airlines has been talking to us as well as to other Star Alliance partners about increased cooperation," Dr. Cheong Choon Kong, Singapore Airlines' chief executive, said in a telephone interview with reporters on Friday.

"We haven't gone into specifics and, even if we had, I don't think it would be very good manners of me to speak out of turn," Cheong said.

United, the main operating unit of UAL Corp. , has worked feverishly in recent months to avert bankruptcy by cutting billions of dollars in expenses through new contracts with its labour groups and lenders.

United, the second-largest U.S. airline, filed an updated application for $1.8 billion in federal backing for loans from the private sector Wednesday. The airline has still not agreed with its individual labour unions on how much each will give up, although it has set a lowered target of $5.8 billion over 5-1/2 years.

Talks between United and its Star Alliance partners, including Deutsche Lufthansa AG , All Nippon Airways and Air Canada , could include discussions over one or more of those carriers taking an equity stake in United to help prevent a bankruptcy, industry sources say.

A United spokeswoman would not comment on whether the airline has talked with its partners about any stake in the company.

"As always, we continue to keep all of our Star Alliance partners abreast of our financial situation," she said.


ALLIES IN TALKS

A spokeswoman for Lufthansa said the airline was adhering to a strategy within the Star Alliance that cautions against the carriers holding each other's equity.

"The strategy of the alliance is that the airlines don't take stakes in each other -- that's why it has been so successful," she said.

Air Canada President and Chief Executive Robert Milton told analysts in a conference call on Friday that he had talked about the issue with Glenn Tilton, United's chief executive.

"We had a good chat and, you know, we're going to look to be supportive to the extent that we can. They are a great partner and provide us tremendous benefit, as we do them," Milton said.

Singapore Airlines has not taken a serious look at buying equity in airlines within the struggling U.S. commercial airline sector, Cheong said, although he did not comment on United in particular.

"Our focus is still near home," he said. "And don't forget that in the U.S. you still have your limitations on foreign ownership."

U.S. regulations limit the voting stake any foreign entity can hold in a U.S. airline to 25 percent, although foreign companies have owned larger percentages of shares in U.S. air carriers and sacrificed the extra voting rights.

Some airline industry executives have urged legislators to ease the restriction, but Congress has shown little interest in rolling back the rules.

[Buster Hyman]

Hmmm...and some thought that Ansetts collapse created a gap in STARs network!

Still, there's an opportunity there if UA repeats history and does a PA in the Pacific! Who knows, we may even see CO back again!

[Wirraway]

Mon "Melbourne Age" 28/10/02

Singapore Airlines weighs options for expansion down under
October 28 2002
By Karen Michelmore
Singapore

Singapore Airlines yesterday indicated a tie-up between Qantas and Air New Zealand could push it towards entering the Australian domestic market.

If Qantas is successful in its grab for a 25 per cent slice of Air New Zealand, the NZ carrier will probably have to quit the Star Alliance network.

This would leave the global airline alliance without a local operator in NZ or Australia, after the collapse of Ansett more than a year ago.

"There are many (factors) to consider and this would be one of them," Singapore Airlines chief executive Cheong Choong Kong said.

Other factors that would affect Singapore Airlines' decision to enter the Australian domestic market were the likely success of the operation, whether it would be welcome and the competing merits of alternative choices for the airline, Dr Cheong said.

Singapore Airlines earlier this month described the prospect of competing with Qantas in Australia as a "viable" option.

Dr Cheong also said Singapore Airlines was keen to expand through equity stakes in airlines, and hinted disapproval at the Federal Government's recent decision to keep Qantas' foreign-ownership cap firmly in place.

"In general, there shouldn't be any restrictions on foreign ownership," Dr Cheong said.

However, the airline would not be "pushed" into making a hasty decision. "We are keeping our options open," he said.

"We are looking at the numbers. We are trying very hard not to let anybody push us into any target date or a schedule."

Singapore Airlines booked a 474 per cent jump in interim net profit to $S773.5 million ($A784.5 million) for the six months to September.

The main reason for the jump was an accounting tax write-back benefit of $S278 million this financial year as well as a major turnaround at Singapore Airlines' cargo freight business, which booked a $S24.5 million operating profit after an $S113 million loss a year ago.

The group's previous year's result was also hampered by a massive deterioration in the value of its stake in Air NZ after the collapse of Ansett.

Higher costs associated with a new staff profit-sharing bonus drove down earnings at its passenger airline, and subsidiaries Singapore Airport Terminal Services and Singapore Airlines Engineering Company.

The recent Bali bombing and the threat of war in the Middle East had "clouded" the outlook for the short term, with the second half tipped to be more challenging than the first, Dr Cheong said.

Fuel costs were also expected to remain high and volatile.

However, the uncertainty would not affect Singapore Airline's decision on whether to launch into Australia.

-AAP

[BlueEagle]

From friends who are still working with SIA I gather there was no bonus paid last year so I am wondering how the 'Dear Doctor' is able to justify his statement that higher costs associated with the profit sharing scheme managed to drive profits down?:(

[Wirraway]

Mon "The Australian"

SIA fears Air NZ may quit alliance
By Steve Creedy
October 28, 2002

SINGAPORE Airlines chief executive Cheong Choong Kong said yesterday that Air New Zealand would probably exit the Star Alliance group if Qantas proceeded with a plan to buy up to 25 per cent of the Kiwi carrier.

He said airline chiefs across the alliance – including United Airlines, Lufthansa and Air Canada – would meet next month to thrash out a response to an Air NZ move to the rival Oneworld group of airlines.

"The departure of any member would be a loss and the prospects of Air New Zealand leaving the Star alliance because of our possible relationship with Qantas will be discussed at our meeting of CEOs next month," he said.

Speculation has been growing in recent weeks that Oneworld member Qantas and Air NZ, which has its annual general meeting tomorrow, are hammering out a deal they believe could satisfy competition concerns of regulators in both countries.

Star is unhappy about the move and could make the process more difficult by demanding that Air NZ serve a two-year notice period.

But Singapore Airlines appears ambivalent about opposing any Qantas-Air NZ partnership by lobbying competition regulators.

Dr Cheong said he would only express a view to regulators if he believed it would make a difference.

However, he doubted this was the case.

The Singaporeans also believe it unlikely Qantas could be lured into Star while British Airways still owns almost a fifth of the Australian carrier.

The comments came after Dr Cheong warned on Friday that SIA's outlook was clouded by the Bali bombing and the threat of Middle East war, despite a startling 474 per cent rise in the group's first-half net profit.

But Dr Cheong said the uncertainty would not be a factor in Singapore Airlines' decision on whether to launch an Australian assault.

"Our plans, of course, for Australia are over the long term. I'm sure they wouldn't be affected by recent events."

He said Singapore Airlines would not be pressured into making a quick decision.

'We're keeping our options open," he told reporters and analysts at a briefing in Singapore.

"We're looking at the numbers. We're trying very hard not to let anybody push us into any target date or a schedule," Dr Cheong said.

The group's $S774 million ($785 million) first-half net profit was boosted by a $278 million deferred tax write-back due to a 2.5 percentage point cut in Singapore's corporate tax rate.

Nonetheless, the result came in ahead of analysts' expectations after the group benefited from a faster than expected recovery in passenger and cargo markets after September 11.

Revenue rose 10.5 per cent to $S5.23 billion, while passenger traffic increased 4.8 per cent and load factors rose 1.7 points to 76.8 per cent. But passenger yield fell 1.1 per cent, reflecting a slower recovery in the premium market, and the passenger airline's operating profit was down 5.4 per cent.

Steve Creedy flew to Singapore courtesy of SIA.

[AN2002]

Regarding the superstition over death (I'm half Chinese myself), they would probably call it "Ansett Airlines" as it was "AnsettAustralia" which crashed.

[Break Right]

AN2002

That explains alot then about your comments.:confused:

[FL CH]

SIA will start a domestic operation in Australia but it will be another 12 months before they start.

[TIMMEEEE]

FL CH.

12 months is an absolute lifetime in the aviation timetable of life.

I doubt SQ would actually start an airline in Oz to pick up a small slice of the market after having spent millions upon millions of $$$ which will incur losses for a number of years.

Dont forget SQ flies from virtually every major Australian centre and have increased their services to Brisbane yet again so why waste the God damned money,time and resources on a supposed start-up which will have to compete aggressively,lose mega bucks and will do so for an extended period because they will never pull out even if it is bleeding them dry and verging on bankrupt - just to save face!!!!

If anything it would put one carrier out of business or severly change the route structure of say VB in the process.

Dr Cheong is under immense pressure after his numerous stuff-ups and face-losing ventures which would rival a former female Labor Party Premier or former greatest treasurer in the world in terms of incompetence!

I believe a commercial agreement is much more appropriate under the circumstances.
After all Dr Cheongs forays so far in the Australasian market haven't been exactly exemplary or inciteful to date now - have they?

[Buster Hyman]

But timmeee...I thought the polka dots showed off her figure nicely!!:eek:

As for SQ, they will also be increasing services into MEL next year!!