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Singapore / Australia "open Skies" - I Hope Not  
User currently offlineQantaspower From Australia, joined Aug 2002, 516 posts, RR: 7
Posted (11 years 7 months 11 hours ago) and read 3554 times:

There has been alot of speculation lately that the Australian Government is going to be stupid enough to enter into an "open skies" agreement with Singapore. This will allow Singaopre Airlines to come in here and "cherry pick" two of QF's most profitable routes being SYD to LA and SYD to Tokyo.

What will QF get in return? By the sounds of it not much. Why would our Govt be so foolish as to do this. Is it really in our interests to donate hundreds of millions of $$$$ to the Singapore Govt.

If UAL goes under our govt should do all it can to get another US carrier in here. If UAL fails and Singapore starts up it may shut out a US operator for good.

It will be grossly unfair to QF if they allow this.

Another thing that really gets to me is the fact that QF cannot operate from Hong Kong to London / Europe yet Cathay operates into all major capitals taking people to Hong Kong and beyond.

Any opinions on this?



36 replies: All unread, showing first 25:
 
User currently onlineVirginFlyer From New Zealand, joined Sep 2000, 4575 posts, RR: 40
Reply 1, posted (11 years 7 months 10 hours ago) and read 3525 times:

Qantaspower, I don't understand your second point. What does QF not being able to operate from HKG to beyond have to do with Cathay flying to all major capitals. I don't see how these equate. You could equate Qantas not being able to operate from HKG to Cathay not being able to fly from Sydney to, say, LAX. If you are in favour of Qantas operating from HKG to Europe, then surely Hong Kong should get some reciprocation - i.e. being able to operate from Australia to the US. But the first part of your post says you don't want Singapore doing this, and I really don't see how having Cathay doing it would be any better for Australia.

Going to your first issue, I haven't kept abreast of the developments for Australian-Singaporean open skies, however if Qantas has the right to carry passengers SIN-LHR (do they currently?), then surely Singapore Airlines should be able to carry pax SYD-LAX. Now if the proposed agreement allows SQ to do this, but not QF, then yes, I would agree with you, it is unfair. But if it is a matter that SQ can sell tickets from Australia to beyond, and QF can sell tickets from Singapore to beyond, then it seems pretty fair to me.

Perhaps you could explain a bit more what the details of the proposed open skies are at the moment, so we could know exactly what we are discussing (perhaps some links to articles, government papers, etc would be helpful)

Cheers,

V/F



"So powerful is the light of unity that it can illuminate the whole earth." - Bahá'u'lláh
User currently offlineRupertvander82 From France, joined Dec 2002, 411 posts, RR: 0
Reply 2, posted (11 years 7 months 9 hours ago) and read 3511 times:

Wow, Qantaspower, do you know how many destinations to Europe and Asia does Qantas operate from SIN? Namely Frankfurt, Rome, Paris, London, Hong Kong and Denpasar.

So do I think it is fair that the Singapore government allows QF to operate out of Changi to these lucrative destinations? Absolutely. It is all about competition.

I don't know if SQ will want to operate flights out of SYD and MEL to USA, but if they are allowed to, I think it is fair to both parties. QF gets rights out of SIN, maybe SQ should get rights out of SYD and MEL.

It is much easier and convenient for QF to operate from SYD/MEL to Europe via SIN/BKK, rather than to go through HKG which is a little further up north, hence a little out of the way.

Maybe if you look at it that way, you should urge the Australian government to allow only Qantas to operate into and out of Australia, restricting SQ, MH, TG etc from flying into Australia, yeah? Wouldn't it be 'more fair' to your darling airline, Qantas?


User currently offlineTravelin man From United States of America, joined Mar 2000, 3504 posts, RR: 0
Reply 3, posted (11 years 7 months 9 hours ago) and read 3504 times:

I do not understand either. Air New Zealand currently operates SYD-LAX (for a little while longer anyway). And Qantas operates AKL-LAX. How would that be any different from allowing Singapore to operate SYD-LAX, while QF flies SIN-LHR?

User currently offlineAussie_ From Australia, joined Dec 2000, 1766 posts, RR: 4
Reply 4, posted (11 years 7 months 9 hours ago) and read 3509 times:

What will QF get in return??? A nice fat market for Australian airlines. AO has already canvassed Australia-Kota Kinabulu-Singapore and have discussed making Singapore into a major hub. I'd expect a couple of years down the track to see services to India and possibly as far as Rome/Athens from Singapore. Might create a little headache for SQ.

User currently offlineAir Taiwan From Australia, joined Dec 1999, 1518 posts, RR: 4
Reply 5, posted (11 years 7 months 9 hours ago) and read 3497 times:

Qantaspower,

It is obvious that you're (like most Aussies) proud of our national airline. But I'm not sure why you're so anti-Singapore! It is a market that Qantas cannot do without! I'm sure there are much to gain for Qantas in an open skies with Singapore. Yes SIA will have the chance to open Australian-originating international routes but Qantas will have the Singapore-Asia and Singapore-Europe market! Surely Singapore as a city has much more potential as a transport hub than Sydney or Melbourne! You can't say that our government is "stupid" in opening such a huge market (Singapore) to Qantas/ Australian!

true?

Jimmy


User currently offlineRupertvander82 From France, joined Dec 2002, 411 posts, RR: 0
Reply 6, posted (11 years 7 months 9 hours ago) and read 3499 times:

QF already get flies to Rome from SIN.

Yes, it might create a little headache for SQ, but then again, it is all fair and square eh?


User currently offlineRmm From Australia, joined Feb 2001, 524 posts, RR: 1
Reply 7, posted (11 years 7 months 9 hours ago) and read 3482 times:

Sounds like someones a little scared of some competition.



User currently offlineQantaspower From Australia, joined Aug 2002, 516 posts, RR: 7
Reply 8, posted (11 years 7 months 9 hours ago) and read 3473 times:

VirginFlyer and others my point is this:-

Firstly in regard to Cathay Pacific. Cathay Pacific is a big competitor on the Australia to Europe routes. Qantas can only compete with Cathay to Hong Kong. Whereas for example Cathay can offer me a ticket to London Qantas cannot offer a Hong Kong resident the same. They are banned from flying Hong Kong to London. If Cathay is able to pick up say Syd to London revenue QF should be allowed to have a piece of the Hong Kong to London action. Surely you see where I am coming from.

Now with Singapore it is different as it is evenly balanced between SQ & QF. Singapore can offer us Aussies a flight to all the European ports it flies to (alot more than QF) not to mention Asia and beyond and South Africa because of its hub location.

At the same time Qantas can fly out of Singapore to Europe, Japan, Hong Kong. ie this is a fair arrangment with both parties benefiting.

Allowing SQ to fly to the USA from Australia is another matter. That is a totally one sided arrangement benefiting Singapore. There is no market for QF to fly from Singapore to the USA. SQ flies to the USA via Hong Kong and Seoul from what I understand. Qantas will not get the third country rights (out of Hong Kong for example ) to do the same.

So as you can see it is totally one sided.



User currently offlineBusinessflyer From Singapore, joined Aug 2001, 288 posts, RR: 0
Reply 9, posted (11 years 7 months 9 hours ago) and read 3465 times:

BA / Qantas is already the second largest operator of airline services out of Changi. I can buy a Qantas ticket to any of its European destinations or to any other destination served by the BA / Qantas combination. What is the issue with allowing SQ to offer direct services from Australia? The only problem I can see is that of bilateral rights, i.e. would a country accept a SQ flight originating in Australia and not transiting through Singapore? Not sure what the answer is...

In addition, I understand that BA / Qantas (and many other airlines) were offered these rights out of Singapore in order to attract them to Singapore rather than any other regional hub since they had to land somewhere on the Europe - Australia route...


User currently offlineBusinessflyer From Singapore, joined Aug 2001, 288 posts, RR: 0
Reply 10, posted (11 years 7 months 8 hours ago) and read 3456 times:

Qantaspower... you first argument is also applicable to any country where by connecting you can travel between Europe and Australia! For example, Japan, Malaysia, Thailand, UAE, Korea, Indonesia... just to name a few. According to you, all of these markets and their operators have an unfair advantage...! Or have I completely mis-understood your argument....?

Anyway, QF benefits from CX's routes through code-sharing for which it receives revenues....


User currently offlineEx_SQer From United States of America, joined Apr 2002, 1436 posts, RR: 5
Reply 11, posted (11 years 7 months 8 hours ago) and read 3445 times:

Qantaspower, you obviously have some very strong opinions on this issue. We do need to clarify a few things, though....

When QF operates from SIN to LHR, FRA, HKG, DPS and other points in Europe and Asia, it uses fifth freedom rights to carry passengers/cargo between these points.

When SQ carries paxs/cargo from Oz to SIN and beyond to other points in Europe and Asia, it uses sixth freedom rights.

When countries negotiate air services agreements, they typically negotiate fourth and fifth freedoms. Sixth freedoms are rarely negotiated because they are difficult to define and enforce. I don't think any bilateral has ever successfully incorporated the issue of sixth freedoms.

If you look at the situation strictly from what is officially negotiated, then SQ is currently at a major disadvantage because QF operates so many fifth freedoms ex-SIN. SQ, in comparison, can only operate fourth freedoms between SIN and Oz.

If you look at the situation from the viewpoint of all (ie negotiated and non-negotiated) freedoms, then the two carriers are pretty evenly matched.

Hopefully I am clear so far and I haven't lost anyone....


ANYWAY... IF there was open skies between SIN and Oz, and if you only looked at the officially negotiated freedoms, then the bilateral would only be considered to be a fair one if SQ had the same amount of fifth freedoms out of Oz as QF has out of SIN.

If you considered the sixth freedoms that SQ enjoys, then yes, open skies between the two countries could be seen as being one-sided in favor of SQ because SQ can now enjoy BOTH fifth and sixth freedoms from Oz.

Sixth freedoms are a sticky issue. No countries have successfuly negotiated these as they are hard to enforce and restrict. In the case of SQ and QF, SQ is geographically suited to enjoy sixth freedoms (but not fifth), and QF is geographically advantaged to enjoy fifth -but not sixth - freedoms out of SIN. Right now, I would say the two countries have a rather equitable arrangement, but yes, you are not wrong is stating that this balance would be shaken up with open skies should SQ choose to use fifth freedoms beyond Oz.

In reality, though, I don't see SQ making too much of a dent for several reasons: (1) they are more interested in domestic traffic within Australia/NZ in order to compete more effectively on the Asia/Europe-Oz market (2) traffic to/from Oz is pretty low yield (face it, if SYD-USA was THAT lucrative we would see many more US carriers in Oz, and we wouldn't have BA and NG as the only European carriers in Oz). The only reason why SQ has been as successful as it has been in Oz is because it carries high volumes and channels them therough its SIN hub using sixth freedoms. QF's modus operandi is much the same, although in their case they take advantage of fifth freedoms to boost profits.

As with other carriers, SQ has limited resources. If the UK or Japan were to offer open skies to SQ (and bear in mind SIN already has open skies with the US) I think you'd see SQ channel their resources to either market in a heartbeat.



User currently offlineQantaspower From Australia, joined Aug 2002, 516 posts, RR: 7
Reply 12, posted (11 years 7 months 8 hours ago) and read 3441 times:

Thats exactly right Business flyer ... just goes to show you how much competition Qantas faces on the Australia to Europe market.

While Qantas is allowed to fly Bangkok - London and do so they are barred by the Hong Kong Govt from flying Hong Kong to London.

In a bizarre move though the Hong Kong Govt has given Air New Zealand the right to fly Hong Kong - London but not Qantas.

The crazy world of international air rights!



User currently offlineEx_SQer From United States of America, joined Apr 2002, 1436 posts, RR: 5
Reply 13, posted (11 years 7 months 8 hours ago) and read 3429 times:

Oh, just thought I'd clarify the issue of fourth, fifth, and sixth freedoms.

When SQ flies a passenger to/from SIN and Oz, they use fourth freedoms.

When QF flies a passenger to/from Oz and Europe, they also use fourth freedoms, even if the flight stops in SIN. As long as the passenger carries on and does not make a stopover in SIN, that passenger is carried under the fourth freedom.

When QF flies a passenger to/from SIN to Europe, they use fifth freedoms.

When SQ flies a passenger to/from Europe to SIN and if the passenger does not stay in SIN but instead gets onto another flight to Oz, then SQ is utilizing sixth freedoms.

As you can see, although both carriers carry passengers to the same cities through SIN, they utilize different freedoms - one of these freedoms is official, one isn't. In this case, QF uses official freedoms, SQ does not.

The same issues crop up when you discuss CX and QF, except in this case it is one-sided because CX takes advantage of sixth freedoms while QF cannot enjoy fifth freedoms to LHR under their current bilateral.


User currently offlineQantaspower From Australia, joined Aug 2002, 516 posts, RR: 7
Reply 14, posted (11 years 7 months 8 hours ago) and read 3429 times:

Thanks so much for the response Ex_Sqer but you have lost me with the sixth freedom rights.

All the Asian carriers operating from Australia can sell tickets to Europe? So they all have sixth freedom right?


User currently offlineBusinessflyer From Singapore, joined Aug 2001, 288 posts, RR: 0
Reply 15, posted (11 years 7 months 8 hours ago) and read 3427 times:

But isn't the HK decision to all ANZ to fly to London from HK based on competitive concerns since CX is already part of OneWorld, like BA and QF. I am pretty sure that HK's decision is based on competition concerns, not anything else. If ANZ is acquired by QF you might see the situation change.

Ex-SQer... as a matter of idle curiousity... what are the definitions of all these different rights...? i.e., third, fourth, fifth, sixth, etc.? Since you had completely lost me by half way through your commentary Smile!


User currently offlineBusinessflyer From Singapore, joined Aug 2001, 288 posts, RR: 0
Reply 16, posted (11 years 7 months 8 hours ago) and read 3423 times:

ex-SQer... you beat me to it!

User currently offlineAviasian From Singapore, joined Jan 2001, 1486 posts, RR: 14
Reply 17, posted (11 years 7 months 8 hours ago) and read 3415 times:

Qantaspower: Talk about wanting your cake and eating it . . . you probably wanted much more.

Do you know how long has Qantas been milking the Singapore-Europe run? Since the very dawn of the Kangaroo Route in the 1930s!!!!! Not enough??? Sure, you cannot expect QF to operate SIN-USA . . . but that's not because you are not permitted, but because QF may not wish to take up the challenge! It is a lucrative route that other airlines such as CI, CX, JL, NH, TG, KE, OZ are all milking through their homebase. Have we forgotten that QF Cargo through very creative arrangements is operating Australia / SIN / BKK / USA cargo flights . . . and this may soon include Shanghai? You could argue that these use the MD11F of Gemini Cargo, but don't forget where the revenue goes to. Qantas passengers enjoy a level of connectivity in SIN that perhaps rival that in any Australian city . . . all these benefit Qantas primarily!

What's to say that Qantas cannot market South America / Southwest Pacific / New Zealand from Singapore and SE Asia?

Look Qantaspower, the Australian government is not stupid as you have feared . . . neither is Qantas' management. It is not a zero-sum game for you folks down-under . . .

KC Sim
Bangkok



User currently offlineEx_SQer From United States of America, joined Apr 2002, 1436 posts, RR: 5
Reply 18, posted (11 years 7 months 8 hours ago) and read 3411 times:

Businessflyer ... I am quick on the draw, you know!

Qantaspower: Yes, technically any Asian carrier (or US, for that matter) flying to Oz and with connecting flights to Europe can carry sixth freedom traffic between Oz and Europe. By the same token, QF can carry sixth freedom traffic between Asia/Europe and NZ.

It's an unfortunate quirk of geography (on QF's part). But, again, sixth freedoms cannot be negotiated satisfactorily, and I don't foresee any day in the near future when countries wil be able to work around these thorny issues.


User currently offlineEx_SQer From United States of America, joined Apr 2002, 1436 posts, RR: 5
Reply 19, posted (11 years 7 months 8 hours ago) and read 3406 times:

Qantaspower - when thinking about Open Skies, you should also think beyond immediate cost/benefits to QF. Allowing other carriers into the market may hurt QF, but it may benefit Oz as a whole in terms of more (and quite possibly cheaper) transport of people and cargo to/from Oz. This may in fact represent a net benefit that outweighs any harm done to QF. In any case, competition tends to make efficient companies stronger, not weaker.

User currently offlineBusinessflyer From Singapore, joined Aug 2001, 288 posts, RR: 0
Reply 20, posted (11 years 7 months 8 hours ago) and read 3400 times:

ex-SQer... very true! Btw, do you ever come back to sunny Singapore?

Anyway, so basically, the fact that Australia is geographically peripheral it could be argued that QF is more constrained. However, don't forget that compared to most other operators QF is doing very very well at the moment due to a decline in the level of competition in its domestic market. Furthermore, most people do not like transiting and BA / Qantas are very strong on the Australia / Europe routes, especially to the UK. I mean, who honestly wants to fly from Oz to the UK via HK or Japan?! Sometimes it is not even that much cheaper...


User currently onlineVirginFlyer From New Zealand, joined Sep 2000, 4575 posts, RR: 40
Reply 21, posted (11 years 7 months 8 hours ago) and read 3396 times:

Qantaspower - I still think you are missing the point. Lets use the route SYD-HKG-LHR as an example. Cathay Pacific are based in Hong Kong. So they are bringing passengers into their base, then sending them out of it again. Qantas are based in Australia. They are sending passengers out of their base, and for HKG-LHR would be sending them from one foreign point to another. As I said before, a better equivalent would be that Qantas doing SYD-HKG-LHR, and selling tickets on the HKG-LHR leg only, would be Cathay doing HKG-SYD-LAX, and selling tickets on the SYD-LAX leg only. It is this latter circumstance which you are arguing against in your original post.

CX flying HKG-LHR is a case of airline from country C flying from country C to country B. QF flying HKG-LHR is a case of airline from country A flying from country C to country B. As you can see, they are two different things. It is not a matter of competing on SYD-HKG-LHR, because QF and CX are not based in the same place, or the same country.

If you want to say that Qantas should be allowed to sell tickets HKG-LHR, then you are going to have to admit that CX or SQ should be allowed to sell tickets SYD-LAX. Otherwise, you are making a very hypocritical argument, as both cases are on the same basis - that is, a carrier from country X selling tickets between country Y and country Z.

Do you understand where my argument is coming from?

Also, can you please supply details on the open-skies porposal as it stands now, so we know what the issue we are discussing is exactly.

V/F



"So powerful is the light of unity that it can illuminate the whole earth." - Bahá'u'lláh
User currently offlineBusinessflyer From Singapore, joined Aug 2001, 288 posts, RR: 0
Reply 22, posted (11 years 7 months 8 hours ago) and read 3393 times:

Isn't this still at discussion stages, I don't think anything has been confirmed or even a draft proposal issued...?





User currently offlineQantaspower From Australia, joined Aug 2002, 516 posts, RR: 7
Reply 23, posted (11 years 7 months 7 hours ago) and read 3371 times:

VirginFlyer,

Apparently discussions are taking place now between both Goverments who are finalising the details of the proposal. There has been alot of articles in the Australian Financial Review. No formal proposal as yet. An open skies agreement was proposed by Singapore a few years back and was rejected due to the benefits being too much in SIA's favour. What has changed now is the proposed tie up between QF & ANZ.

These current talks were initiated by the Australian Govt from what I understand. If an agreement is entered into the 2 carriers will have unlimited rights to fly wherever they choose from either Australia or Singapore. However this will only work of course if the "third country" eg USA allows it. In this case Singapore already has an open skies with the USA and from what I undersatnd if they get an agreement with Australia thay can start up between Sydney / MEL and LA straight away. Who knows they could end up replacing United as the Star carrier over the Pacific.

Singapore Airlines have come out very strongly in favour of an open skies with Australia. Qantas are totally opposed as there is little in it for them.




User currently offlineTravel From Australia, joined May 2001, 355 posts, RR: 0
Reply 24, posted (11 years 7 months 6 hours ago) and read 3351 times:

Should SQ go ahead with establishing Australia's third airline, I wonder whether SQ has intentions to have this so called third Aussie airline to establish routes to USA and Europe via Hong Kong?



25 QantasAirways : I do agree to your argument, in a certain perspective. While Qantas is my favourite airline, I still feel that a lot of competition could shape them u
26 Ex_SQer : Businessflyer, I was back in SIN Christmas and NY. Met Ryanair!!! (speaking of which... he has been very quiet lately) and SQ772. I don't get back muc
27 Air Taiwan : I can't understand why Qantas would oppose it. I mean, basically, with an openskies agreement, Qantas can fly anywhere they want from Singapore! Singa
28 Ejazz : I tend to agree with you QantasPower although I suppose I shouldn't as SIA pays my mortgage. Forgetting about 4th, 5th and 6th freedom flights just lo
29 Al : SIN already is an open port, (the same as DXB,) so "in return" QF are already getting a good deal with their full traffic rights flights over SIN to E
30 Flyinghighboy : Even though I love my national airline, i hope they get an open skies agreement, Why? it should lower airfares from Australia to USA routes if SQ star
31 QantasAirways : I agree with you Air Taiwan, QF has a lot more to gain most definately. The competition issue will be a great benefit for consumers and as I mentioned
32 QANTASpower : Air Taiwan / QantasAirways Qantas cannot fly anywhere they want from Singapore. They have to have the third country rights to do so. Regards
33 KrisworldB777 : From the outset, I’m of the mentality that the agreement will be far more useful and welcome to Singapore Airlines than Qantas, and that is unde
34 QantasAirways : Qantaspower, QF already have many rights to fly through Singapore (that have been accepted by the third country). Why shouldn't SQ be allowed to fly f
35 Singapore_Air : Well. Even Qantas has admitted that there is a 'virtual open skies agreement between Singapore and Australia' (quote from Geoff Dixon) and he said tha
36 Air Taiwan : Well said QantasAirways! I do think Qantas need competition since now it holds more than 80% of the Australian domestic market! What could happen to Q
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