Wirraway
28th Jun 2003, 13:26
http://www.channelnewsasia.com/stories/todaynews/view/808/1html
Is ValuAir doing SIA a big favour?
By Lee Han Shih
Don’t be surprised if ValuAir, a no-frills airline wannabe led by former Singapore Airlines deputy chairman Lim Chin Beng, eventually turns out to be funded by none other than SIA’s own parent, the government-owned Temasek Holdings.
And don’t be surprised if Temasek ropes in Mr Ong Beng Seng, hotelier and owner of the now-defunct Singapore-to-Vietnam Region Air, as its business partner to invest in the fledgling airline.
Aviation circles have been abuzz with Mr Lim’s bold move to set up a discount airline here.
If ValuAir secures a licence (called AOC or air operators’ certificate), it will become Singapore’s third airline after SIA and its regional carrier, SilkAir.
Setting up an airline, even a small one, needs a lot of money and many good people.
For the moment, the focus is on the growing ValuAir team, which includes at least four retired SIA veterans. They are Mr Richard Gomez, human relations VP and the man who knows everyone in SIA; Captain Ken Toft, who will recruit and train pilots; Mr Thian Kim Fay, the financial expert familiar with sharing passengers and revenues with other airlines; and Mr David Chen, whose job is to help ValuAir lease the cheapest planes and find the best maintenance contracts.
With his Gang of Four in place, Mr Lim is now in the position to move beyond SIA retirees to SIA employees.
Legally, there is nothing to stop him from getting SIA people to switch to ValuAir. But as Mr Lim is widely credited - along with Mr J Y Pillay - with building SIA from a small start-up to the world’s most profitable airline, many feel he should not do anything that might hurt his former employer.
They need not worry. Mr Lim is probably doing to ValuAir what he had done for 36 years to SIA: He is helping Singapore’s flagship carrier.
For decades, first SIA then also SilkAir have enjoyed the advantages of being the only airlines operating out of Singapore, a must-stop location for the global traffic.
But these days are numbered. As SIA chairman Koh Boon Hwee has warned, if a rival airline wants to hub in Singapore, there is no reason for the Government - now committed to free trade - to reject the application if it fits all the criteria.
This would worry the Singapore Government, which obviously ranks SIA’s welfare as part of the national interest.
Once an airline is hubbed here, the Civil Aviation Authority of Singapore is obliged to treat it on equal terms with SIA and SilkAir, and allot it unused air traffic rights, like the crucial Singapore-Thailand routes.
This could affect seriously the fortunes of the two airlines, and perhaps trigger even more retrenchments.
What is the best way to stop a foreign airline from competing here, without giving Singapore a bad name in the global market? The answer is obvious: Set up another airline owned by Singaporeans.
Call it competition, Singapore-style. When it comes to introducing rivalry in strategic industries, the Government prefers competition among “insiders”.
Singapore Telecom’s monopoly was broken by M1 (run by the government-linked Keppel) and StarHub (run by the Government-owned Singapore Technologies).
In legalised gambling, Singapore Pools and the Totalisator Board compete for punters’ money.
In media, newspaper publisher Singapore Press Holdings and radio and television broadcaster MediaCorp were allowed to go into each other’s markets.
The same is true for public transport, where the operators of buses and MRT (rail systems) have moved into each other’s territories. As the pay TV market is now on the verge of being “liberalised”, the monopoly of StarHub Cable Vision is expected to be challenged by - you guessed it - SingTel.
So wouldn’t it make sense to use the same formula in the airline sector?
Mr Lim, a former chairman of the Singapore Tourism Board who now chairs SPH, has impeccable credentials. ValuAir would be more trusted as a competitor to SIA and SilkAir than, say, a foreign entity that grabs those valuable air traffic rights.
For all you know, ValuAir could provide a feeder service to the bigger airlines and even hire their retrenched staff.
Perhaps, this is what ValuAir director and spokesman Jimmy Lau meant when he said his airline would be “complementing SIA”. Mr Lau used to run the biennial Asian Aerospace exhibition.
But money could prove a problem. Mr Lim is certainly well-off - his SIA share options are enough to make him a multi-millionaire - but neither he nor his known partners may have enough to fund an airline, even a small one.
Who can bear the financial burden?
While it may make sense for a large foreign airline to hub here, many factors may stand in the way of starting a brand-new airline. The start-up cost, the high per-plane overheads and the lack of a customer base are dampeners. But Temasek may be tempted to encourage such a venture if it protects SIA from unfettered foreign attack.
How about Mr Ong Beng Seng? OBS, as Mr Ong is commonly known, has experience in running an airline. He has good contacts in places such as Vietnam, Bali and the Maldives and he likes the high-flying life. Moreover, Temasek is comfortable working with him, having teamed up with him last year to help in the takeover of NatSteel. If Temasek comes in, OBS could come aboard, too.
So far, the identity of ValuAir’s potential backers is pure speculation. But think of all the little “clues” in the air.
Mr Lim, for example, has chosen to put up his office in Temasek Tower, perhaps taking over some of the space vacated by Temasek Holdings.
His team includes Ms Natasha Foong, who used to work in the investment arm of the Economic Development Board, as equal partner. And ValuAir is now looking to raise US$40 million ($70 million).
Go figure.
=========================================
Sat "Straits Times"
SIA and pilots' union to meet in court next week
SINGAPORE Airlines and its pilots' union will face each other in court on Monday to settle their dispute over proposed wage cuts.
After the Manpower Ministry's efforts to broker a deal failed early this month, SIA referred the dispute to the Industrial Arbitration Court (IAC).
On Monday, the two parties will come before Justice Tan Lee Meng, the IAC president, to present their sides of the case.
The hearing has been scheduled to last a week.
The court's decision will be final and legally binding.
At the core of SIA's disagreement with the 1,600-strong Air Line Pilots' Association Singapore (Alpa-S) is the quantum of wage cuts the airline has proposed, and the lump sum payment it has offered as compensation.
SIA wants captains and first officers to take wage cuts of 22.5 per cent and 15 per cent respectively, with a one-off payment to make up for it if profits reach at least $700 million for the current financial year ending March next year.
Alpa-S has, however, rejected the proposal, saying that the cut is too much when coupled with the proposed implementation of 10 to 12 days of no-pay leave every two months.
The outcome of the court ruling will be closely watched by SIA's four other unions as the company is currently negotiating for wage cuts for other staff.
As part of its efforts to restructure its costs after it lost $370 million in April and last month, the airline dropped the axe last Thursday on 414 employees, mainly ground staff and workers from its subsidiaries.
No cabin crew or pilots were laid off, but the company has not ruled out further retrenchments.
=========================================
Is ValuAir doing SIA a big favour?
By Lee Han Shih
Don’t be surprised if ValuAir, a no-frills airline wannabe led by former Singapore Airlines deputy chairman Lim Chin Beng, eventually turns out to be funded by none other than SIA’s own parent, the government-owned Temasek Holdings.
And don’t be surprised if Temasek ropes in Mr Ong Beng Seng, hotelier and owner of the now-defunct Singapore-to-Vietnam Region Air, as its business partner to invest in the fledgling airline.
Aviation circles have been abuzz with Mr Lim’s bold move to set up a discount airline here.
If ValuAir secures a licence (called AOC or air operators’ certificate), it will become Singapore’s third airline after SIA and its regional carrier, SilkAir.
Setting up an airline, even a small one, needs a lot of money and many good people.
For the moment, the focus is on the growing ValuAir team, which includes at least four retired SIA veterans. They are Mr Richard Gomez, human relations VP and the man who knows everyone in SIA; Captain Ken Toft, who will recruit and train pilots; Mr Thian Kim Fay, the financial expert familiar with sharing passengers and revenues with other airlines; and Mr David Chen, whose job is to help ValuAir lease the cheapest planes and find the best maintenance contracts.
With his Gang of Four in place, Mr Lim is now in the position to move beyond SIA retirees to SIA employees.
Legally, there is nothing to stop him from getting SIA people to switch to ValuAir. But as Mr Lim is widely credited - along with Mr J Y Pillay - with building SIA from a small start-up to the world’s most profitable airline, many feel he should not do anything that might hurt his former employer.
They need not worry. Mr Lim is probably doing to ValuAir what he had done for 36 years to SIA: He is helping Singapore’s flagship carrier.
For decades, first SIA then also SilkAir have enjoyed the advantages of being the only airlines operating out of Singapore, a must-stop location for the global traffic.
But these days are numbered. As SIA chairman Koh Boon Hwee has warned, if a rival airline wants to hub in Singapore, there is no reason for the Government - now committed to free trade - to reject the application if it fits all the criteria.
This would worry the Singapore Government, which obviously ranks SIA’s welfare as part of the national interest.
Once an airline is hubbed here, the Civil Aviation Authority of Singapore is obliged to treat it on equal terms with SIA and SilkAir, and allot it unused air traffic rights, like the crucial Singapore-Thailand routes.
This could affect seriously the fortunes of the two airlines, and perhaps trigger even more retrenchments.
What is the best way to stop a foreign airline from competing here, without giving Singapore a bad name in the global market? The answer is obvious: Set up another airline owned by Singaporeans.
Call it competition, Singapore-style. When it comes to introducing rivalry in strategic industries, the Government prefers competition among “insiders”.
Singapore Telecom’s monopoly was broken by M1 (run by the government-linked Keppel) and StarHub (run by the Government-owned Singapore Technologies).
In legalised gambling, Singapore Pools and the Totalisator Board compete for punters’ money.
In media, newspaper publisher Singapore Press Holdings and radio and television broadcaster MediaCorp were allowed to go into each other’s markets.
The same is true for public transport, where the operators of buses and MRT (rail systems) have moved into each other’s territories. As the pay TV market is now on the verge of being “liberalised”, the monopoly of StarHub Cable Vision is expected to be challenged by - you guessed it - SingTel.
So wouldn’t it make sense to use the same formula in the airline sector?
Mr Lim, a former chairman of the Singapore Tourism Board who now chairs SPH, has impeccable credentials. ValuAir would be more trusted as a competitor to SIA and SilkAir than, say, a foreign entity that grabs those valuable air traffic rights.
For all you know, ValuAir could provide a feeder service to the bigger airlines and even hire their retrenched staff.
Perhaps, this is what ValuAir director and spokesman Jimmy Lau meant when he said his airline would be “complementing SIA”. Mr Lau used to run the biennial Asian Aerospace exhibition.
But money could prove a problem. Mr Lim is certainly well-off - his SIA share options are enough to make him a multi-millionaire - but neither he nor his known partners may have enough to fund an airline, even a small one.
Who can bear the financial burden?
While it may make sense for a large foreign airline to hub here, many factors may stand in the way of starting a brand-new airline. The start-up cost, the high per-plane overheads and the lack of a customer base are dampeners. But Temasek may be tempted to encourage such a venture if it protects SIA from unfettered foreign attack.
How about Mr Ong Beng Seng? OBS, as Mr Ong is commonly known, has experience in running an airline. He has good contacts in places such as Vietnam, Bali and the Maldives and he likes the high-flying life. Moreover, Temasek is comfortable working with him, having teamed up with him last year to help in the takeover of NatSteel. If Temasek comes in, OBS could come aboard, too.
So far, the identity of ValuAir’s potential backers is pure speculation. But think of all the little “clues” in the air.
Mr Lim, for example, has chosen to put up his office in Temasek Tower, perhaps taking over some of the space vacated by Temasek Holdings.
His team includes Ms Natasha Foong, who used to work in the investment arm of the Economic Development Board, as equal partner. And ValuAir is now looking to raise US$40 million ($70 million).
Go figure.
=========================================
Sat "Straits Times"
SIA and pilots' union to meet in court next week
SINGAPORE Airlines and its pilots' union will face each other in court on Monday to settle their dispute over proposed wage cuts.
After the Manpower Ministry's efforts to broker a deal failed early this month, SIA referred the dispute to the Industrial Arbitration Court (IAC).
On Monday, the two parties will come before Justice Tan Lee Meng, the IAC president, to present their sides of the case.
The hearing has been scheduled to last a week.
The court's decision will be final and legally binding.
At the core of SIA's disagreement with the 1,600-strong Air Line Pilots' Association Singapore (Alpa-S) is the quantum of wage cuts the airline has proposed, and the lump sum payment it has offered as compensation.
SIA wants captains and first officers to take wage cuts of 22.5 per cent and 15 per cent respectively, with a one-off payment to make up for it if profits reach at least $700 million for the current financial year ending March next year.
Alpa-S has, however, rejected the proposal, saying that the cut is too much when coupled with the proposed implementation of 10 to 12 days of no-pay leave every two months.
The outcome of the court ruling will be closely watched by SIA's four other unions as the company is currently negotiating for wage cuts for other staff.
As part of its efforts to restructure its costs after it lost $370 million in April and last month, the airline dropped the axe last Thursday on 414 employees, mainly ground staff and workers from its subsidiaries.
No cabin crew or pilots were laid off, but the company has not ruled out further retrenchments.
=========================================