Third Airline Imminent (Alan Kohler)must read
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Gibbo,
I am not certain that you are correct .. perhaps one of our aviation and administrative law specialists might care to comment ?
The Act clearly requires CASA to ensure that certain things (procedures and persons) are in place and that the organisation has appropriate financial resources to do the job ..
The following extract from the relevant CASA procedures manual appears to suggest that a simple change in ownership is not a problem ... but unless a sale process kept the original incorporated entity, there appears to be a need to undergo a fresh application .. and I couldn't imagine anyone wanting to operate a company using a tainted ACN.
(the extract can be located easily on the CASA website)
3.2.3 Change of AOC Holder’s ACN
A company may not change its ACN. If CASA processes an application from a company with an ACN unknown to CASA, the company must be a different legal entity to any company known to CASA.
AOCs are not transferable, therefore the holder will need to apply for a new AOC and such applications must be made under paragraph (2)(a) or (3)(a) of the Form of Application (see 2.2 Sample Instrument of Approval of Form of Application for AOC).
and the following may be useful for background ...
3.2.4 Change of AOC Holder’s Organisation, Personnel or Structure
Sub-section 28(1) of the Act requires that CASA be satisfied about a number of matters in relation to an AOC application. These include the organisation, qualifications of personnel and management structure provided by the applicant. However, once an AOC has been issued the holder can change any of these matters without recourse to CASA. Sub-section 28(1) only relates to the assessment of the application for an AOC. Once an AOC is issued, there is nothing in the Act that requires the AOC holder to retain a particular structure, particular directors, or particular key personnel. However, section 28BF of the Act requires an AOC holder to ‘maintain an appropriate organisation, with a sufficient number of appropriately qualified personnel and a sound and effective management structure’. If any change to the organisation or personnel of an AOC holder
means that the holder no longer meets the requirements of section 28BF, then CASA can take appropriate action under other sections of the Act.
3.2.5 Change of Composition of Legal Entity
An AOC may be issued to two or more legal entities which constitute a partnership. Should one of the legal entities which comprise the AOC holder change, then obviously the AOC holder has changed.
AOCs are not transferable, therefore the remaining holder or holders will need to apply for a new AOC and such applications must be made under paragraph (2)(a) or (3)(a) of the Form of Application (see 2.2 Sample Instrument of Approval of Form for Application for AOC).
I am not certain that you are correct .. perhaps one of our aviation and administrative law specialists might care to comment ?
The Act clearly requires CASA to ensure that certain things (procedures and persons) are in place and that the organisation has appropriate financial resources to do the job ..
The following extract from the relevant CASA procedures manual appears to suggest that a simple change in ownership is not a problem ... but unless a sale process kept the original incorporated entity, there appears to be a need to undergo a fresh application .. and I couldn't imagine anyone wanting to operate a company using a tainted ACN.
(the extract can be located easily on the CASA website)
3.2.3 Change of AOC Holder’s ACN
A company may not change its ACN. If CASA processes an application from a company with an ACN unknown to CASA, the company must be a different legal entity to any company known to CASA.
AOCs are not transferable, therefore the holder will need to apply for a new AOC and such applications must be made under paragraph (2)(a) or (3)(a) of the Form of Application (see 2.2 Sample Instrument of Approval of Form of Application for AOC).
and the following may be useful for background ...
3.2.4 Change of AOC Holder’s Organisation, Personnel or Structure
Sub-section 28(1) of the Act requires that CASA be satisfied about a number of matters in relation to an AOC application. These include the organisation, qualifications of personnel and management structure provided by the applicant. However, once an AOC has been issued the holder can change any of these matters without recourse to CASA. Sub-section 28(1) only relates to the assessment of the application for an AOC. Once an AOC is issued, there is nothing in the Act that requires the AOC holder to retain a particular structure, particular directors, or particular key personnel. However, section 28BF of the Act requires an AOC holder to ‘maintain an appropriate organisation, with a sufficient number of appropriately qualified personnel and a sound and effective management structure’. If any change to the organisation or personnel of an AOC holder
means that the holder no longer meets the requirements of section 28BF, then CASA can take appropriate action under other sections of the Act.
3.2.5 Change of Composition of Legal Entity
An AOC may be issued to two or more legal entities which constitute a partnership. Should one of the legal entities which comprise the AOC holder change, then obviously the AOC holder has changed.
AOCs are not transferable, therefore the remaining holder or holders will need to apply for a new AOC and such applications must be made under paragraph (2)(a) or (3)(a) of the Form of Application (see 2.2 Sample Instrument of Approval of Form for Application for AOC).
Last edited by john_tullamarine; 2nd Jun 2002 at 08:59.
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With reference to the "sale/tranfer" of AN's AOC to a third party it might do to look at what has and happening at YC, now QQ.
Flight West was put into voluntary liquidation in June last year, it then, with Sept 11 and AN falling over, went into administration (same as AN). The creditors then voted to put it under a Deed of Company Arrangement (same as AN). FWA was then sold, quite cheaply, and is in the throws of being renamed and expanding.
During all of the above the FW AOC was kept alive and all key officers kept in place.
FWA's AOC has therefore been "sold/transfered".
So it can be done.
By the way my two bobs worth is that FWA (new name) will be doing for the "third airline" what they were doing for AN, plus a bit .
Flight West was put into voluntary liquidation in June last year, it then, with Sept 11 and AN falling over, went into administration (same as AN). The creditors then voted to put it under a Deed of Company Arrangement (same as AN). FWA was then sold, quite cheaply, and is in the throws of being renamed and expanding.
During all of the above the FW AOC was kept alive and all key officers kept in place.
FWA's AOC has therefore been "sold/transfered".
So it can be done.
By the way my two bobs worth is that FWA (new name) will be doing for the "third airline" what they were doing for AN, plus a bit .
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Chimbu
I called the whole sequence of events in over 12 months ago and sadly have been totally correct. The last boot to fall is SQ steppinginto the Aus domestic market gaining assets at a bargain basement price.
The Asian giant is patient and has waited well, redirected the stink of the collapse ont NZ as is now ready to open a new carrier up to fight the might of the rat.
They have been furiously subsidising connecting flights out of regional Australia since AN fell over so expect to see KD,YC,PO and YT as feeders within the short term.
Best news is many more seats for our mates and many more cabins for our FA buddies to prowl.
Best all
Loco bloke
I called the whole sequence of events in over 12 months ago and sadly have been totally correct. The last boot to fall is SQ steppinginto the Aus domestic market gaining assets at a bargain basement price.
The Asian giant is patient and has waited well, redirected the stink of the collapse ont NZ as is now ready to open a new carrier up to fight the might of the rat.
They have been furiously subsidising connecting flights out of regional Australia since AN fell over so expect to see KD,YC,PO and YT as feeders within the short term.
Best news is many more seats for our mates and many more cabins for our FA buddies to prowl.
Best all
Loco bloke
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eile s,
Not attacking VB but I think it got most of it`s market share from Ansetts` demise.The slide,as you know,started well before Sept.
If a slick new boutique operator comes to the fore,with a marketing designer type image,I think VB will have a fight.Especially with their Target image.
As the Deputy PM inferred today,your wage and 18 day 737 conversion will always make VB competitive-what puzzles me though,where was your good for the nation attitude in 89?
Not attacking VB but I think it got most of it`s market share from Ansetts` demise.The slide,as you know,started well before Sept.
If a slick new boutique operator comes to the fore,with a marketing designer type image,I think VB will have a fight.Especially with their Target image.
As the Deputy PM inferred today,your wage and 18 day 737 conversion will always make VB competitive-what puzzles me though,where was your good for the nation attitude in 89?
Last edited by MT Edelstone56; 2nd Jun 2002 at 11:53.
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QDuck,
The CASA procedures manuals make it quite clear that CASA isn't too fussed if the company remains unchanged (the concern is not with name changes, rather a new ACN). There is always the ability to bring an aberrant operation to heel if warranted via existing provisions in the Act.
I would be surprised if the new owners wanted to take on an existing ACN with potential hidden liabilities which might bite them later on.
If I may be permitted to speculate, perhaps the strategy is to continue operations as a stopgap, with guarantees regarding liabilities, and subsequently (in parallel to a stopgap continued operation) set up a new structure ?
The CASA procedures manuals make it quite clear that CASA isn't too fussed if the company remains unchanged (the concern is not with name changes, rather a new ACN). There is always the ability to bring an aberrant operation to heel if warranted via existing provisions in the Act.
I would be surprised if the new owners wanted to take on an existing ACN with potential hidden liabilities which might bite them later on.
If I may be permitted to speculate, perhaps the strategy is to continue operations as a stopgap, with guarantees regarding liabilities, and subsequently (in parallel to a stopgap continued operation) set up a new structure ?
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Eisle S,
With only two operators, some passengers are definitely going to fly with Virgin simply because they don't like QF. They might make another choice apart from Virgin if there was a third operator.
On the subject of the AOC, what company currently holds (or at least can retrieve) the Ansett AOC. I doubt if it's Ansett Holdings (In Administration).
It is probably with an interim company related to the transitional arrangements of the failed TESNA bid.
With only two operators, some passengers are definitely going to fly with Virgin simply because they don't like QF. They might make another choice apart from Virgin if there was a third operator.
On the subject of the AOC, what company currently holds (or at least can retrieve) the Ansett AOC. I doubt if it's Ansett Holdings (In Administration).
It is probably with an interim company related to the transitional arrangements of the failed TESNA bid.
Last edited by strobes_on; 2nd Jun 2002 at 12:36.
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Mon "Sydney Morning Herald" 3/6/02
Big airline ready to plug the Ansett gap
By Darren Goodsir in Shanghai and Michelle Grattan
June 3 2002
The world's largest airlines group is close to backing one of its members in the launch of an offshoot as a third Australian carrier.
Delegates from a conference in Shanghai of Star Alliance airlines indicated that the job could go to Singapore Airlines or possibly Air New Zealand.
The new carrier would aim to fill the vacuum in its world routes created by the collapse of Ansett - and to address the continuing concerns of alliance passengers over their ensuing inability to
redeem frequent-flyer points in Australia.
The start-up airline would intitially aim at limited domestic flights on the congested east coast routes.
The Federal Government welcomed the idea. The Minister for Transport, John Anderson, said yesterday that he looked forward to "a very real possibility" of a third airline.
The climate and policy framework were right, he told Channel 10. "And given that many of the inefficiencies that held the sector back before have now been challenged or broken, the private sector will see to it that you see a growing sector."
The industry was a growing slice of the economy anyway, and so the slack would be taken up. "I'm quite confident you'll see new entrants try."
The chief executive of Singapore Airlines, Cheong Choong Kong, agreed that Ansett's demise had created a vacuum in network coverage, adding "we are working on solutions to compensate for that loss".
"But you wouldn't expect us to do Qantas a favour by annunciating our strategy in a public domain in a forum like this."
Dr Cheong described as an "interesting suggestion" the possibility that an alliance airline could play a major part in filling the gap on Australian routes.
"We are extremely open-minded and we are leaving all our options open and flexible."
Air New Zealand's chief executive, Ralph Norris, said the launch of a third domestic airline was one of a series of options being developed to overcome "the hole" left by Ansett and to help increase feeder traffic to its partners.
"It certainly is an issue," Mr Norris said. "Air New Zealand has been looking at its options, particularly on the east coast of Australia, but we haven't taken any decisions as yet in this regard. I won't rule out anything. It is an option, but it hasn't got much traction at this point in the alliance."
United Airlines' senior vice-president, Graham Atkinson, agreed that a solution needed to be found to help his passengers get beyond Australia's capitals.
"There is clearly a hole," he said. "To have an effective presence in Australia, you really need someone ... us or a partner, who can carry passengers domestically as well as internationally."
Since Ansett's collapse last September, when Star Alliance members declined to honour many frequent-flyer trips, passengers on United, Air New Zealand, Thai and Singapore airlines have been unable to redeem loyalty points in Australia.
Bookings for travel within Australia have also been difficult. There are no lounge facilities, and connections are cumbersome, with passengers required to re-check bags and book new tickets on either Qantas or Virgin Blue.
Qantas, a member of the rival oneworld affiliation, has offered Star Alliance airlines discounts for tickets, but this is not seen as a workable alternative.
On some routes, including Adelaide and Canberra, Air New Zealand's feeder traffic has dropped by 25 per cent.
Other Star Alliance carriers have been carrying healthy loads, but the lack of an Australian partner is a long-term concern.
Air New Zealand, which cut lose its wholly-owned Ansett subsidiary and needed a massive New Zealand Government rescue package to survive, is now anxious to revive some missing links for Star Alliance passengers.
The airline could even receive limited financial support from some alliance airlines to begin operations.
Because of the deregulated trans-Tasman market, Air New Zealand can start domestic services in Australia with few hurdles - just as Qantas is competing vigorously in New Zealand.
Meanwhile, the chief executive of Qantas, Geoff Dixon, was scheduled last night to hold fresh talks with Mr Norris on Qantas's hopes of taking a 25 per cent shareholding in Air New Zealand
Big airline ready to plug the Ansett gap
By Darren Goodsir in Shanghai and Michelle Grattan
June 3 2002
The world's largest airlines group is close to backing one of its members in the launch of an offshoot as a third Australian carrier.
Delegates from a conference in Shanghai of Star Alliance airlines indicated that the job could go to Singapore Airlines or possibly Air New Zealand.
The new carrier would aim to fill the vacuum in its world routes created by the collapse of Ansett - and to address the continuing concerns of alliance passengers over their ensuing inability to
redeem frequent-flyer points in Australia.
The start-up airline would intitially aim at limited domestic flights on the congested east coast routes.
The Federal Government welcomed the idea. The Minister for Transport, John Anderson, said yesterday that he looked forward to "a very real possibility" of a third airline.
The climate and policy framework were right, he told Channel 10. "And given that many of the inefficiencies that held the sector back before have now been challenged or broken, the private sector will see to it that you see a growing sector."
The industry was a growing slice of the economy anyway, and so the slack would be taken up. "I'm quite confident you'll see new entrants try."
The chief executive of Singapore Airlines, Cheong Choong Kong, agreed that Ansett's demise had created a vacuum in network coverage, adding "we are working on solutions to compensate for that loss".
"But you wouldn't expect us to do Qantas a favour by annunciating our strategy in a public domain in a forum like this."
Dr Cheong described as an "interesting suggestion" the possibility that an alliance airline could play a major part in filling the gap on Australian routes.
"We are extremely open-minded and we are leaving all our options open and flexible."
Air New Zealand's chief executive, Ralph Norris, said the launch of a third domestic airline was one of a series of options being developed to overcome "the hole" left by Ansett and to help increase feeder traffic to its partners.
"It certainly is an issue," Mr Norris said. "Air New Zealand has been looking at its options, particularly on the east coast of Australia, but we haven't taken any decisions as yet in this regard. I won't rule out anything. It is an option, but it hasn't got much traction at this point in the alliance."
United Airlines' senior vice-president, Graham Atkinson, agreed that a solution needed to be found to help his passengers get beyond Australia's capitals.
"There is clearly a hole," he said. "To have an effective presence in Australia, you really need someone ... us or a partner, who can carry passengers domestically as well as internationally."
Since Ansett's collapse last September, when Star Alliance members declined to honour many frequent-flyer trips, passengers on United, Air New Zealand, Thai and Singapore airlines have been unable to redeem loyalty points in Australia.
Bookings for travel within Australia have also been difficult. There are no lounge facilities, and connections are cumbersome, with passengers required to re-check bags and book new tickets on either Qantas or Virgin Blue.
Qantas, a member of the rival oneworld affiliation, has offered Star Alliance airlines discounts for tickets, but this is not seen as a workable alternative.
On some routes, including Adelaide and Canberra, Air New Zealand's feeder traffic has dropped by 25 per cent.
Other Star Alliance carriers have been carrying healthy loads, but the lack of an Australian partner is a long-term concern.
Air New Zealand, which cut lose its wholly-owned Ansett subsidiary and needed a massive New Zealand Government rescue package to survive, is now anxious to revive some missing links for Star Alliance passengers.
The airline could even receive limited financial support from some alliance airlines to begin operations.
Because of the deregulated trans-Tasman market, Air New Zealand can start domestic services in Australia with few hurdles - just as Qantas is competing vigorously in New Zealand.
Meanwhile, the chief executive of Qantas, Geoff Dixon, was scheduled last night to hold fresh talks with Mr Norris on Qantas's hopes of taking a 25 per cent shareholding in Air New Zealand
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SIA already expanding their operations in Australia.
They currently have a basic flying school at YPJT. From July their advanced flight training moves to YBMC. They are operating more flights into YBBN.
The company (Aeromil) who is providing the support (ie Sim Building and maintenance) is also one of the partners in QAH/FWA. From what I've been told the sim building at YBMC will be larger enough to hold 3 sims in total (the LR45 plus 2 others).
FWA could play a large part in any SIA domestic airline. SIA aircraft could operate the trunk routes, while the F100's could operate the leisure routes that cannot support B737s from VB (just like the QLINK 717's do). KD,ZL and YT could feed both SIA domestic and VB.
Let the games begin.
They currently have a basic flying school at YPJT. From July their advanced flight training moves to YBMC. They are operating more flights into YBBN.
The company (Aeromil) who is providing the support (ie Sim Building and maintenance) is also one of the partners in QAH/FWA. From what I've been told the sim building at YBMC will be larger enough to hold 3 sims in total (the LR45 plus 2 others).
FWA could play a large part in any SIA domestic airline. SIA aircraft could operate the trunk routes, while the F100's could operate the leisure routes that cannot support B737s from VB (just like the QLINK 717's do). KD,ZL and YT could feed both SIA domestic and VB.
Let the games begin.
Nunc est bibendum
Strobes, Germany with Lufthansa, France with Air France, Italy with Alitaliasort of roll of the top of the list.
Australia is certainly not unique in the situation we now find ourselves.
Australia is certainly not unique in the situation we now find ourselves.
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Keg
I should have added that I am talking about a country the size of OZ where continental flights would ordinarily attract a premium class.
The US provides numerous two class and three class operators.
I should have added that I am talking about a country the size of OZ where continental flights would ordinarily attract a premium class.
The US provides numerous two class and three class operators.
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Air New Zealand run third airline here?
NOT B****Y likely!!
Any attempt to do so should be strongly resisted ,especially by "the minister for QANTAS".
Let us have an airline run properly by one of the other star alliance partners and not by an organisation which has demonstrated it's economic incompetence.
Cirrus
NOT B****Y likely!!
Any attempt to do so should be strongly resisted ,especially by "the minister for QANTAS".
Let us have an airline run properly by one of the other star alliance partners and not by an organisation which has demonstrated it's economic incompetence.
Cirrus
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FYI from www.travelbiz.com.au
The Star Alliance has flagged plans to start a third domestic airline in Australia operated by Singapore Airlines or Air New Zealand.
It is expected the new entrant would initially service congested east coast routes, filling the vacuum left by the demise of Ansett.
The federal government has reportedly welcomed the possibility of a third carrier entering the domestic market with federal transport minister John Anderson “quite confident” that the number of players will grow.
SQ ceo Cheong Choong Kong told the Sydney Morning Herald that the airline was “working on solutions to compensate” for the collapse of Ansett.
At the same time, Air NZ ceo Ralph Norris said the move was an option for the airline, as it would help feed domestic traffic to its Star Alliance partners, but no decisions had yet been made.
According to the Sydney Morning Herald, Air NZ would face few barriers if it did launch an Australian domestic service.
3 June 2002
nick!
The Star Alliance has flagged plans to start a third domestic airline in Australia operated by Singapore Airlines or Air New Zealand.
It is expected the new entrant would initially service congested east coast routes, filling the vacuum left by the demise of Ansett.
The federal government has reportedly welcomed the possibility of a third carrier entering the domestic market with federal transport minister John Anderson “quite confident” that the number of players will grow.
SQ ceo Cheong Choong Kong told the Sydney Morning Herald that the airline was “working on solutions to compensate” for the collapse of Ansett.
At the same time, Air NZ ceo Ralph Norris said the move was an option for the airline, as it would help feed domestic traffic to its Star Alliance partners, but no decisions had yet been made.
According to the Sydney Morning Herald, Air NZ would face few barriers if it did launch an Australian domestic service.
3 June 2002
nick!
Nunc est bibendum
Now I see where you are going Strobes but how many places with a population of less than 20 million have more than one airline?
We may be similar in size to the US but if you consider we are 1/10th of the population then we should have a need for 1/10th of the airlines. Be interesting to see how those figures pan out.
We may be similar in size to the US but if you consider we are 1/10th of the population then we should have a need for 1/10th of the airlines. Be interesting to see how those figures pan out.
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Air New Zealand
They can't be serious!! Air New Zealand run an airline in Australia ever again???? After they showed Australians how incompetent they are with their effort to run Ansett. No passenger would have any confidence in them.
Someone save us.....
Someone save us.....
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Does anyone have any info re the number of business/premium seats Ansett used to sell per week?
Whatever the figure is, then that is about the starting level a third operator could aim for.
Considering the idea that if it is Silk Air, and a limited number of narrow bodies may be involved, they should not have any problem filling seats.
Whatever the figure is, then that is about the starting level a third operator could aim for.
Considering the idea that if it is Silk Air, and a limited number of narrow bodies may be involved, they should not have any problem filling seats.
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Reuters
Monday June 3, 4:12 PM (S/Pore)
SIA resurfaces as Australian airline contender
By Sophie Hares
SYDNEY, June 3 (Reuters) - Speculation a third airline plans to muscle in on Australia's domestic aviation market resurfaced on Monday, with industry watchers putting Singapore Airlines at the top of the list of likely contenders.
Keen to bridge the Star Alliance gap left by the collapse of Ansett and secure traffic for international routes, SIA has the infrastructure to cheaply and quickly set up a domestic airline to challenge the dominance of Qantas Airways Ltd
But analysts doubted SIA's enthusiasm for an Australian foray after it backed away from a recapitalisation of former second ranked Ansett and as it struggles to claw back from an economic downturn and the impact of the September 11 attacks.
"I'm sure they're looking at a solution, but whether that's coming in and setting up a whole new carrier, I'm not convinced," said Bruce Low, aviation analyst at ABN AMRO.
"It may be a longer term solution. SIA's been looking at the Aussie market for years, but the whole landscape's changed."
The past year has proved the most turbulent in Australasian aviation history after Air New Zealand-owned Ansett collapsed, as years of mismanagement combined with vicious discounting, soaring costs and sliding Australasian currencies took their toll.
"The demise of Ansett has created a vacuum," SIA chief executive Cheong Choong Kong told a news conference in Shanghai at the weekend.
"We are seeking a solution, but we don't want to do Qantas a favour by announcing publicly our plan."
A senior spokesman for the carrier said he could not provide further details.
TRIGGER POINT
Analysts say OneWorld member Qantas could put further pressure on its bigger rival Star Alliance with plans to take a 25 percent stake in Star member Air NZ, currently 82 percent NZ government owned after a NZ$885 million rescue package.
"There are certain trigger points which might bring it forward, one of which is Qantas' talks with Air NZ," said Ian Thomas from the Centre for Asia Pacific Aviation.
Australian newspapers have reported that Ansett administrators were in talks with a handful of airlines including Dubai-based Emirates [EMAIR.UL] and Hong Kong's Dragon Airlines, to buy some of Ansett's core assets.
Analysts deemed those two carriers unlikely contenders but did not rule out completely a joint venture between SIA and Air NZ, despite the Singaporean carrier being badly burnt by losses on its Air NZ investment.
They point out SIA's has maintained a toehold in the Kiwi carrier with a 4.5 percent stake, down from 25 percent after its shareholding was diluted by the NZ government bailout.
"It doesn't make sense to start from scratch considering the set-up costs," said Seah Hiang Hong, an analyst with Kim Eng Securities in Singapore.
TWO'S COMPANY
Analysts deem the A$10 billion domestic market only big enough for two players, and say any new entrant could struggle to grasp passengers from Qantas, which dominates 85 percent of the market, and Virgin Blue [VA.UL] with the remainder.
"Virgin is building market share. If ever you wanted to establish yourself, now's the time as the longer you leave it the more market share Virgin will get," said Thomas.
Richard Branson's Virgin Blue remains the only Australian player the Star Alliance could possibly team up with, but the discount airline ruled out such a tie.
"We're not interested in membership of Star Alliance, nor would we probably be offered it," Brett Godfrey, Virgin Blue's chief executive told reporters in Brisbane.
"I've always believed there will be a third entrant, the question is how serious that third entrant will be. I believe there is room for a niche player."
Shares in Qantas closed down eight cents, or 1.75 percent, at A$4.49, while SIA shares were 40 cents up at S$13.10.
(Additional reporting by Rob Schutze in Brisbane, Edwin Khoo in Singapore)
Monday June 3, 4:12 PM (S/Pore)
SIA resurfaces as Australian airline contender
By Sophie Hares
SYDNEY, June 3 (Reuters) - Speculation a third airline plans to muscle in on Australia's domestic aviation market resurfaced on Monday, with industry watchers putting Singapore Airlines at the top of the list of likely contenders.
Keen to bridge the Star Alliance gap left by the collapse of Ansett and secure traffic for international routes, SIA has the infrastructure to cheaply and quickly set up a domestic airline to challenge the dominance of Qantas Airways Ltd
But analysts doubted SIA's enthusiasm for an Australian foray after it backed away from a recapitalisation of former second ranked Ansett and as it struggles to claw back from an economic downturn and the impact of the September 11 attacks.
"I'm sure they're looking at a solution, but whether that's coming in and setting up a whole new carrier, I'm not convinced," said Bruce Low, aviation analyst at ABN AMRO.
"It may be a longer term solution. SIA's been looking at the Aussie market for years, but the whole landscape's changed."
The past year has proved the most turbulent in Australasian aviation history after Air New Zealand-owned Ansett collapsed, as years of mismanagement combined with vicious discounting, soaring costs and sliding Australasian currencies took their toll.
"The demise of Ansett has created a vacuum," SIA chief executive Cheong Choong Kong told a news conference in Shanghai at the weekend.
"We are seeking a solution, but we don't want to do Qantas a favour by announcing publicly our plan."
A senior spokesman for the carrier said he could not provide further details.
TRIGGER POINT
Analysts say OneWorld member Qantas could put further pressure on its bigger rival Star Alliance with plans to take a 25 percent stake in Star member Air NZ, currently 82 percent NZ government owned after a NZ$885 million rescue package.
"There are certain trigger points which might bring it forward, one of which is Qantas' talks with Air NZ," said Ian Thomas from the Centre for Asia Pacific Aviation.
Australian newspapers have reported that Ansett administrators were in talks with a handful of airlines including Dubai-based Emirates [EMAIR.UL] and Hong Kong's Dragon Airlines, to buy some of Ansett's core assets.
Analysts deemed those two carriers unlikely contenders but did not rule out completely a joint venture between SIA and Air NZ, despite the Singaporean carrier being badly burnt by losses on its Air NZ investment.
They point out SIA's has maintained a toehold in the Kiwi carrier with a 4.5 percent stake, down from 25 percent after its shareholding was diluted by the NZ government bailout.
"It doesn't make sense to start from scratch considering the set-up costs," said Seah Hiang Hong, an analyst with Kim Eng Securities in Singapore.
TWO'S COMPANY
Analysts deem the A$10 billion domestic market only big enough for two players, and say any new entrant could struggle to grasp passengers from Qantas, which dominates 85 percent of the market, and Virgin Blue [VA.UL] with the remainder.
"Virgin is building market share. If ever you wanted to establish yourself, now's the time as the longer you leave it the more market share Virgin will get," said Thomas.
Richard Branson's Virgin Blue remains the only Australian player the Star Alliance could possibly team up with, but the discount airline ruled out such a tie.
"We're not interested in membership of Star Alliance, nor would we probably be offered it," Brett Godfrey, Virgin Blue's chief executive told reporters in Brisbane.
"I've always believed there will be a third entrant, the question is how serious that third entrant will be. I believe there is room for a niche player."
Shares in Qantas closed down eight cents, or 1.75 percent, at A$4.49, while SIA shares were 40 cents up at S$13.10.
(Additional reporting by Rob Schutze in Brisbane, Edwin Khoo in Singapore)
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AAP
Any new entrant needs a fair go: Virgin Blue
BRISBANE, June 3 AAP|Published: Monday June 3, 7:07 PM
Virgin Blue chief executive Brett Godfrey today pleaded for "a fair go" for any new carrier that tried to start up in Australia.
Mr Godfrey said Virgin Blue would enjoy the competition offered by a three-airline industry, adding that there may be niche market opportunities for a new entrant.
But he warned it was important the Australian Competition and Consumer Commission beef up its powers to protect fledgling carriers against anti-competitive behaviour.
"I believe a third entrant will start up," Mr Godfrey said.
"I'm not afraid of a new airline coming in.
"But ... they've got to fight for it, grab their market as we did, but they should be given a fair go."
There is speculation that a member of the international Star Alliance loyalty scheme might come to Australia to fill the vacuum left by the demise of Ansett, which was a member of the scheme.
Star Alliance members Singapore Airlines and Air New Zealand have been touted as carriers that might take on the job.
There have been continuing concerns over the inability of alliance passengers to redeem frequent-flyer points in Australia.
Last week, Australian Tourist Commission managing director Ken Boundy said Australia was missing out on tens of thousands of international visitors because of the lack of a Star Alliance carrier.
Mr Boundy told the Australian Tourism Exchange in Brisbane there was a business opportunity in the marketplace waiting to be seized.
Qantas, which belongs to the Oneworld loyalty program, has been giving Star Alliance members discounts since the collapse of Ansett.
Mr Godfrey said Virgin Blue has spoken with some Star Alliance members which could help fill the void left by the failed airline.
"We will do some arrangement no doubt with some Star Alliance members but we're not going to change our model to accommodate them to the degree that they want," he said.
"We're not interested in membership of Star Alliance nor would we probably be offered."
By Chris Herde
Any new entrant needs a fair go: Virgin Blue
BRISBANE, June 3 AAP|Published: Monday June 3, 7:07 PM
Virgin Blue chief executive Brett Godfrey today pleaded for "a fair go" for any new carrier that tried to start up in Australia.
Mr Godfrey said Virgin Blue would enjoy the competition offered by a three-airline industry, adding that there may be niche market opportunities for a new entrant.
But he warned it was important the Australian Competition and Consumer Commission beef up its powers to protect fledgling carriers against anti-competitive behaviour.
"I believe a third entrant will start up," Mr Godfrey said.
"I'm not afraid of a new airline coming in.
"But ... they've got to fight for it, grab their market as we did, but they should be given a fair go."
There is speculation that a member of the international Star Alliance loyalty scheme might come to Australia to fill the vacuum left by the demise of Ansett, which was a member of the scheme.
Star Alliance members Singapore Airlines and Air New Zealand have been touted as carriers that might take on the job.
There have been continuing concerns over the inability of alliance passengers to redeem frequent-flyer points in Australia.
Last week, Australian Tourist Commission managing director Ken Boundy said Australia was missing out on tens of thousands of international visitors because of the lack of a Star Alliance carrier.
Mr Boundy told the Australian Tourism Exchange in Brisbane there was a business opportunity in the marketplace waiting to be seized.
Qantas, which belongs to the Oneworld loyalty program, has been giving Star Alliance members discounts since the collapse of Ansett.
Mr Godfrey said Virgin Blue has spoken with some Star Alliance members which could help fill the void left by the failed airline.
"We will do some arrangement no doubt with some Star Alliance members but we're not going to change our model to accommodate them to the degree that they want," he said.
"We're not interested in membership of Star Alliance nor would we probably be offered."
By Chris Herde