Is Jetstar Asia really a Singaporean company?
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Is Jetstar Asia really a Singaporean company?
When 3K was formed, it had QF as 45% shareholder, Temasek as 19% shareholder, and 2 Temasek proxies who held the rest. QF simplified this deal last year to QF 49%, a Singaporean proxy called Denis Choo holding 51%. This was to ensure that 3K still remained majority Singapore owned, thus allowing it to operate with a Singapore AOC.
Refering to this
Plane talking | The Australian
Buchanan has continued to expand the Asian operations and now speaks of Jetstar's "pan-Asian strategy". Last year he renegotiated the ownership structure of the Singapore-based Jetstar Asia. The airline was established in December 2004 with a number of shareholders, including Qantas with 45 per cent, the Singapore government investment agency, Temasek, and a string of other investors. Under the new deal, there are only two shareholders - Jetstar with 49 per cent of the business, and a Singaporean travel wholesaler, Dennis Choo, who was given financial assistance organised by Qantas.
It can be argued that Jetstar Asia is an Australian controlled company as far as air services agreements are concerned. Although the Singapore govt has made it clear that they will not protect SIA over enhancing Singapore's connectivity and air hub development, if I were SIA i would be fuming mad.
A lot of the ASAs that SIA lobbied and fought for over the years - virtually EU open skies (especially for 3rd and 4th freedoms), 1st to 8th freedoms for the UK, SIN-USA open skies, SIN-China virtual open skies for 3rd and 4th freedoms, the new Japan rights, ASEAN open skies etc etc etc..... will be handed to the QF Group on a platter, via Jetstar Asia.
3K can fly 20 times a day from SIN to Stansted and beyond to the USA if they so wish. 3K will probably start SIN-ATH and SIN-FCO, which SIA has languished at 2-3 times a week for 20 years, forcing SIA to suspend services to those 2 destinations. 3K is already using a Singapore AOC to fly SIN-AKL.
2 years ago, Malaysia tried to argue that 3K was an Australian carrier, and thus did not come under a qualified designated Singaporean carrier for SIN-KUL liberalisation. Singapore's civil aviation authority fought hard for Jetstar Asia to be recognised as a Singaporean carrier, and Malaysia eventually accepted it.
Do you think governments around the world will wake up to the fact that 3K is an Australian carrier masquerading as a Singaporean one? My SQ contacts in international relations told me that SQ won't have a case to fight this, because most countries respect the AOC designation of the respective civil aviation authorities. So if Singapore's CAAS designates 3K as a Singaporean carrier, it is very unlikely that another government will question CAAS, and vice versa.
Refering to this
Plane talking | The Australian
Buchanan has continued to expand the Asian operations and now speaks of Jetstar's "pan-Asian strategy". Last year he renegotiated the ownership structure of the Singapore-based Jetstar Asia. The airline was established in December 2004 with a number of shareholders, including Qantas with 45 per cent, the Singapore government investment agency, Temasek, and a string of other investors. Under the new deal, there are only two shareholders - Jetstar with 49 per cent of the business, and a Singaporean travel wholesaler, Dennis Choo, who was given financial assistance organised by Qantas.
It can be argued that Jetstar Asia is an Australian controlled company as far as air services agreements are concerned. Although the Singapore govt has made it clear that they will not protect SIA over enhancing Singapore's connectivity and air hub development, if I were SIA i would be fuming mad.
A lot of the ASAs that SIA lobbied and fought for over the years - virtually EU open skies (especially for 3rd and 4th freedoms), 1st to 8th freedoms for the UK, SIN-USA open skies, SIN-China virtual open skies for 3rd and 4th freedoms, the new Japan rights, ASEAN open skies etc etc etc..... will be handed to the QF Group on a platter, via Jetstar Asia.
3K can fly 20 times a day from SIN to Stansted and beyond to the USA if they so wish. 3K will probably start SIN-ATH and SIN-FCO, which SIA has languished at 2-3 times a week for 20 years, forcing SIA to suspend services to those 2 destinations. 3K is already using a Singapore AOC to fly SIN-AKL.
2 years ago, Malaysia tried to argue that 3K was an Australian carrier, and thus did not come under a qualified designated Singaporean carrier for SIN-KUL liberalisation. Singapore's civil aviation authority fought hard for Jetstar Asia to be recognised as a Singaporean carrier, and Malaysia eventually accepted it.
Do you think governments around the world will wake up to the fact that 3K is an Australian carrier masquerading as a Singaporean one? My SQ contacts in international relations told me that SQ won't have a case to fight this, because most countries respect the AOC designation of the respective civil aviation authorities. So if Singapore's CAAS designates 3K as a Singaporean carrier, it is very unlikely that another government will question CAAS, and vice versa.
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Dennis Choo is a person not a proxy.
Also owns the Tour East group.
SQ has far more favourable access to the Aus market - could operate a fully owned domestic airline if it wanted (and effectively does via its 34% holding in Tiger).
Tiger also has substantial foreign ownership - Indigo, RyanAir, Dhalia
Also owns the Tour East group.
SQ has far more favourable access to the Aus market - could operate a fully owned domestic airline if it wanted (and effectively does via its 34% holding in Tiger).
Tiger also has substantial foreign ownership - Indigo, RyanAir, Dhalia
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breakfastburrito 12th November 2009, 07:12
DrPepz, you are correct about jetconnect - although I would add this to the "legacy" category, of limited growth prospects. If it where to grow, why did they also start j* NZ?
I also believe this strategy is for pan-asian "stateless" virtual airline, unencumbered by the limitations imposed by the sale act & to avoid the Australian industrial & aviation regulatory enviroment. These were the primary motives for the inception & continued expansion of j*.
DrPepz
12th November 2009, 08:38
Indeed, breakfast burrito. A pan-Asian stateless airline would be virtually impossible to achieve in the next 20-30 years. Tiger wanted to start Philippines and Seoul bases this year but some Korean unions protested that Tiger Korea would be in reality a Singaporean carrier with a Korean proxy, and the Philippines is hell bent on protecting Philippine Airlines.
To achieve something like what the EU achieved, in Asia, would be almost impossible. Most Asian countries compete with each other rather than cooperate, and there are vastly different standards of living and ways of government across the region.
DrPepz, you are correct about jetconnect - although I would add this to the "legacy" category, of limited growth prospects. If it where to grow, why did they also start j* NZ?
I also believe this strategy is for pan-asian "stateless" virtual airline, unencumbered by the limitations imposed by the sale act & to avoid the Australian industrial & aviation regulatory enviroment. These were the primary motives for the inception & continued expansion of j*.
DrPepz
12th November 2009, 08:38
Indeed, breakfast burrito. A pan-Asian stateless airline would be virtually impossible to achieve in the next 20-30 years. Tiger wanted to start Philippines and Seoul bases this year but some Korean unions protested that Tiger Korea would be in reality a Singaporean carrier with a Korean proxy, and the Philippines is hell bent on protecting Philippine Airlines.
To achieve something like what the EU achieved, in Asia, would be almost impossible. Most Asian countries compete with each other rather than cooperate, and there are vastly different standards of living and ways of government across the region.
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moa999 - agree with you on SIA's access to the Australian domestic market.
However I'm speaking of international AOCs, which require that an airline of a particular country be majority owned and/or controlled by nationals of that country. It is arguable that Jetstar Asia is majority controlled by nationals of Singapore. Denis Choo is indeed a person, but if QF had to offer him finance to "purchase" the 51% of Jetstar Asia he did not own, it gives QF effectively 100% economic control of Jetstar Asia. It is thus arguable that Jetstar Asia is not a majority Singapore-controlled entity.
Tiger cannot fly internationally out of Australia because it is not a majority Australian owned company.
Secondly, access to Singapore's AOCs gives QF access to most of the EU plus the UK, 3rd and 4th freedoms to China and India, soon to be open skies in ASEAN etc. This is a market of nearly 4 billion people. Arguably, QF can operate (and probably will operate) a hub and spoke system in Singapore, much like SQ has been doing for 30+ years.
However I'm speaking of international AOCs, which require that an airline of a particular country be majority owned and/or controlled by nationals of that country. It is arguable that Jetstar Asia is majority controlled by nationals of Singapore. Denis Choo is indeed a person, but if QF had to offer him finance to "purchase" the 51% of Jetstar Asia he did not own, it gives QF effectively 100% economic control of Jetstar Asia. It is thus arguable that Jetstar Asia is not a majority Singapore-controlled entity.
Tiger cannot fly internationally out of Australia because it is not a majority Australian owned company.
Secondly, access to Singapore's AOCs gives QF access to most of the EU plus the UK, 3rd and 4th freedoms to China and India, soon to be open skies in ASEAN etc. This is a market of nearly 4 billion people. Arguably, QF can operate (and probably will operate) a hub and spoke system in Singapore, much like SQ has been doing for 30+ years.
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Indeed breakfast burrito. Interesting how things have developed.
Singapore is one of those countries in Asia that is very open to foreign investment, since the whole island has nothing to offer the world except its people (i.e. the workforce). So there is little protectionism of local companies (ironically even though the govt through Temasek has stakes in nearly all the major companes)
What QF achieved in SIN probably cannot be achieved anywhere else in Asia. The Jetstar Pacific thing has been a near disaster. And seeing how the Philippines and Korea have reacted to Tiger trying to start a base there, it would be nearly impossible for QF to try and do the same.
Air Asia is very strong in BKK, KUL and CGK, leaving SIN as the only plausible hub left for the QF group's expansion. SIN as a country capitalised on it and sold the idea very strongly to QF/JQ. I worked with Changi Airport Group till a few weeks ago, and I know that my colleagues worked very hard on this JQ Asian hub deal, and put together a very solid proposal.
Of course on a national level, 3K's hub and presence in SIN is very beneficial to Singapore - it's just not beneficial at all to SIA. If I were SIA I would be really pissed, but the govt has made it clear that SIA is not Singapore, and 3K is creating 100 jobs in Singapore for every plane that it bases here.
Australia has been very open to Singaporean investment compared to the rest of Asia. Most of Asia is suspicious of Singaporean investment, leaving Australia as a very safe, benign destination for Singaporean savings and capital. (Yes there will usually be debate on the one party state and what not, but in the end Singaporean companies tend to love to overpay for Australian assets, and Australians gladly accept our money with wide open arms)
Jetstar's presence in SIN probably further cements the very strong economic links between the two countries. SQ must feel "cheated" that its own shareholder is playing it out, but I guess they to realise that they are not the country.
Singapore is one of those countries in Asia that is very open to foreign investment, since the whole island has nothing to offer the world except its people (i.e. the workforce). So there is little protectionism of local companies (ironically even though the govt through Temasek has stakes in nearly all the major companes)
What QF achieved in SIN probably cannot be achieved anywhere else in Asia. The Jetstar Pacific thing has been a near disaster. And seeing how the Philippines and Korea have reacted to Tiger trying to start a base there, it would be nearly impossible for QF to try and do the same.
Air Asia is very strong in BKK, KUL and CGK, leaving SIN as the only plausible hub left for the QF group's expansion. SIN as a country capitalised on it and sold the idea very strongly to QF/JQ. I worked with Changi Airport Group till a few weeks ago, and I know that my colleagues worked very hard on this JQ Asian hub deal, and put together a very solid proposal.
Of course on a national level, 3K's hub and presence in SIN is very beneficial to Singapore - it's just not beneficial at all to SIA. If I were SIA I would be really pissed, but the govt has made it clear that SIA is not Singapore, and 3K is creating 100 jobs in Singapore for every plane that it bases here.
Australia has been very open to Singaporean investment compared to the rest of Asia. Most of Asia is suspicious of Singaporean investment, leaving Australia as a very safe, benign destination for Singaporean savings and capital. (Yes there will usually be debate on the one party state and what not, but in the end Singaporean companies tend to love to overpay for Australian assets, and Australians gladly accept our money with wide open arms)
Jetstar's presence in SIN probably further cements the very strong economic links between the two countries. SQ must feel "cheated" that its own shareholder is playing it out, but I guess they to realise that they are not the country.
Originally Posted by DrPepz
It can be argued that Jetstar Asia is an Australian controlled company as far as air services agreements are concerned.
Originally Posted by DrPepz
Although the Singapore govt has made it clear that they will not protect SIA over enhancing Singapore's connectivity and air hub development, if I were SIA i would be fuming mad.
Originally Posted by DrPepz
A lot of the ASAs that SIA lobbied and fought for over the years - virtually EU open skies (especially for 3rd and 4th freedoms), 1st to 8th freedoms for the UK, SIN-USA open skies, SIN-China virtual open skies for 3rd and 4th freedoms, the new Japan rights, ASEAN open skies etc etc etc..... will be handed to the QF Group on a platter, via Jetstar Asia.
Originally Posted by DrPepz
Do you think governments around the world will wake up to the fact that 3K is an Australian carrier masquerading as a Singaporean one?
Originally Posted by DrPepz
So if Singapore's CAAS designates 3K as a Singaporean carrier, it is very unlikely that another government will question CAAS, and vice versa.
Originally Posted by DrPepz
Tiger cannot fly internationally out of Australia because it is not a majority Australian owned company.
Originally Posted by DrPepz
Secondly, access to Singapore's AOCs gives QF access to most of the EU plus the UK, 3rd and 4th freedoms to China and India, soon to be open skies in ASEAN etc.
The target market Jetstar is aiming for is not the same as SQ or QF, they are more after the lower yield secondary markets.
Originally Posted by DrPepz
Singapore is one of those countries in Asia that is very open to foreign investment, since the whole island has nothing to offer the world except its people (i.e. the workforce).
Originally Posted by DrPepz
What QF achieved in SIN probably cannot be achieved anywhere else in Asia.
Originally Posted by DrPepz
And seeing how the Philippines and Korea have reacted to Tiger trying to start a base there, it would be nearly impossible for QF to try and do the same.
The only what this perception will ever be removed is for the Singapore Government and Temasek to sell all their shares, fully list the companies, and remove Temasek cronies from senior management positions.
Originally Posted by DrPepz
Of course on a national level, 3K's hub and presence in SIN is very beneficial to Singapore - it's just not beneficial at all to SIA.
Originally Posted by DrPepz
Australia has been very open to Singaporean investment compared to the rest of Asia. Most of Asia is suspicious of Singaporean investment, leaving Australia as a very safe, benign destination for Singaporean savings and capital.
I assume that you are alluding to what the Aussies were 'fighting for', because I'm sure you are aware that at the time, Singapore was part of the British Empire. A very good read about Australian POWs there is 'The Naked Island', by Russ Braddon. It is worth noting that many Allied soldiers were handed over to the Japanese by 'locals'. One wonders what Singapore would be like today if the Japanese were still there.
While we are on a Singapore thread, what is it with Singaporean businesses? Tiger and Rex crew not happy campers. Victorian bush fires triggered by dodgy power lines (owned by Singapore). Singapore Airlines not exactly all it seems below the glam (hull loss at Taipei, and nearly Auckland, a few years ago). In Hong Kong, a regional carrier managed by Singaporeans has had many incidents, including an attempted takeoff on a taxiway at HKG. The same airline bizarrely required cabin crew to recite slogans ('apothegms') on arrival for duty, until ridiculed in the press. A previous CEO of Cathay Pacific Airways, of Singaporean descent, removed from office by the Swire group (I won't start on what he was doing to the airline).
I won't be applying for any of those Singapore Cargo jobs any time soon!
While we are on a Singapore thread, what is it with Singaporean businesses? Tiger and Rex crew not happy campers. Victorian bush fires triggered by dodgy power lines (owned by Singapore). Singapore Airlines not exactly all it seems below the glam (hull loss at Taipei, and nearly Auckland, a few years ago). In Hong Kong, a regional carrier managed by Singaporeans has had many incidents, including an attempted takeoff on a taxiway at HKG. The same airline bizarrely required cabin crew to recite slogans ('apothegms') on arrival for duty, until ridiculed in the press. A previous CEO of Cathay Pacific Airways, of Singaporean descent, removed from office by the Swire group (I won't start on what he was doing to the airline).
I won't be applying for any of those Singapore Cargo jobs any time soon!
