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Qantas To Launch New Asian Low Cost Carrier  
User currently offlineSydscott From Australia, joined Oct 2003, 3189 posts, RR: 20
Posted (10 years 8 months 3 weeks 5 days 22 hours ago) and read 5995 times:


Qantas to launch new Asian low cost carrier
Source: MORE
Published: Tuesday April 6 2004, 2:00 PM

Qantas Airways Ltd said today it would be the major investor in a new intra-Asia, low cost airline based in Singapore.

Qantas chief executive Geoff Dixon said the airline would fly to a range of Asian cities within five hours of Singapore and operate a fleet of single aisle aircraft.

These would either be Boeing 737-800s or Airbus A320s, Mr Dixon said.


--------------------------------------------------------------------------------

Mr Dixon said new the airline would begin flying before the end of 2004 with four aircraft and build to a fleet of more than 20 aircraft over the following three years.

He said Qantas would own 49.9 per cent of the new airline, with 21.1 per cent owned by Tony Chew and 10 per cent owned by FF Wong, both prominent Singaporean businessmen.

He added that Qantas did not currently fly on any of the new airline's preferred routes.


38 replies: All unread, showing first 25:
 
User currently offlineSydscott From Australia, joined Oct 2003, 3189 posts, RR: 20
Reply 1, posted (10 years 8 months 3 weeks 5 days 22 hours ago) and read 5982 times:


Obviously QF has a taste for low cost airlines at the moment!!!!!!  Smile/happy/getting dizzy


User currently offlineScandinA340 From Australia, joined Apr 2004, 89 posts, RR: 0
Reply 2, posted (10 years 8 months 3 weeks 5 days 22 hours ago) and read 5974 times:

There go those ideas about where the 733s will end up! QF must be pretty confident in its JetStar model...

ScandinA340


User currently offlineQF744 From Australia, joined Feb 2004, 415 posts, RR: 1
Reply 3, posted (10 years 8 months 3 weeks 5 days 22 hours ago) and read 5973 times:

guys,
here is the official release from QF about the new low-cost carrier.
it all sounds very exciting!!
QF744

SINGAPORE, 6 April 2004: Qantas said today it would be the major investor in a new intra-Asia, low cost airline based in Singapore.
The Chief Executive Officer of Qantas, Geoff Dixon, said the airline would fly to a range of Asian cities within five hours of Singapore and operate a fleet of single aisle aircraft – either Boeing 737-800s or Airbus A320s.
He said that Qantas did not currently fly on any of the new airline’s preferred routes.
Mr Dixon said the airline would begin flying before the end of 2004 with four aircraft and build to a fleet of more than 20 aircraft over the following three years.
He said Qantas would own 49.9 per cent of the new airline, with 21.1 per cent owned by Mr Tony Chew and 10 per cent owned by Mr FF Wong, both prominent Singaporean businessmen. Temasek Holdings (Private) Limited, a major investment company based in Singapore, will own the remaining 19 per cent.
The owners will invest a total of S$100 million in the new airline, with Qantas contributing S$50 million. All aircraft will be financed through operating leases.
“This is a modest investment for Qantas but it is an excellent opportunity to participate in the growing intra-Asia travel market,” Mr Dixon said.
“The region, which has a population of more than 3 billion people, is enjoying strong economic growth and features many potential destinations for point-to-point travel from Singapore.
“Qantas has had considerable experience competing against low cost carriers in the Australian market over the past ten years and, more recently, Qantas set up its own low cost airline – Jetstar – which is taking bookings and will commence flying in Australia next month.
“A team from Qantas has been working on this project for the past nine months. The team, headed by Mr Con Korfiatis, a senior executive at Qantas, includes former executives of successful European low cost airlines.
“The team, plus people to be recruited throughout Asia in coming months, will open offices in Singapore and be responsible for bringing the airline on line.
“Our aim with the new airline is to stimulate this market, as other low cost carriers have done in other parts of the world.
“We do not aim and do not expect to be a threat to the major established airlines in the region.”
Mr Dixon said Qantas had been flying to Singapore for 69 years and Changi Airport was Qantas’ largest international hub.
“It is a very strong base for the airline and we have excellent local partners in Mr Chew, Mr Wong and Temasek,” Mr Dixon said.
Mr Chew said: “I believe in the growth of budget air travel in Asia. Together with our partners, Qantas and Temasek, we have the right combination of financial backing, market knowledge, and airline experience.
“The new low cost carrier will deliver quality, value and safety to the traveller.”
The launch of the new airline is dependent on it obtaining a Singapore Air Operators’ Certificate and substantive traffic rights.
Mr Dixon said the new airline would further grow the Qantas flying product, which comprised:
Qantas International, offering about 540 flights each week serving 84 destinations in 35 countries;
Australian Airlines, the full service international leisure carrier, which operates more than 50 flights each week to 12 destinations in six countries;
Qantas Domestic, offering about 2,500 flights each week;
Jetstar, the domestic low cost carrier that will start flying on 25 May; and
QantasLink, the regional airline, offering more than 1,900 flights each week.



IT'S ALL ABOUT THE UPPER DECK
User currently offlineSydscott From Australia, joined Oct 2003, 3189 posts, RR: 20
Reply 4, posted (10 years 8 months 3 weeks 5 days 22 hours ago) and read 5959 times:


I'm sure SALE will be able to provide them with leased A320's!!!!! haha That'd be good for a laugh.


User currently offlineQF744 From Australia, joined Feb 2004, 415 posts, RR: 1
Reply 5, posted (10 years 8 months 3 weeks 5 days 22 hours ago) and read 5929 times:

what a large group Qantas now runs!
-Qantas
-QantasLink
-Qantas domestic New Zealand
-Australian Airlines
-Jetstar
-Air Pacific
-Air Niugini
-New Asian low-cost

hopefully throw Air New Zealand in that group soon!

QF744



IT'S ALL ABOUT THE UPPER DECK
User currently offlinePER744 From Australia, joined Mar 2003, 405 posts, RR: 2
Reply 6, posted (10 years 8 months 3 weeks 5 days 22 hours ago) and read 5894 times:

The 19% holding by Temasek is quite interesting.

User currently offlineVh-bzf From Australia, joined Oct 1999, 841 posts, RR: 0
Reply 7, posted (10 years 8 months 3 weeks 5 days 21 hours ago) and read 5863 times:

Qantas is definitely in an agressive expansion mode! Geoff Dixon has a responsibility to the shareholders to expand & grow the Qantas business! He certainly looks as if He is doing just that!

Wonder what SQ thinks of all this activity in its backyard......hmmm, will they go 'tit for tat' & support/finance a lcc in Australia?????

Very Interesting

BZF  Smile



Ansett Australia - (was) One of the worlds great airlines!
User currently offlineAerohottie From Australia, joined Mar 2004, 802 posts, RR: 3
Reply 8, posted (10 years 8 months 3 weeks 5 days 21 hours ago) and read 5858 times:

Yeehaa Qantas!!!!

I just hope they arent expanding too much, and taking on too much debt!!!



What?
User currently offlineN754pr From , joined Dec 1969, posts, RR:
Reply 9, posted (10 years 8 months 3 weeks 5 days 21 hours ago) and read 5855 times:

With Air Asia, Tiger and Valuair is there room for one more??

User currently offlineDocpepz From Singapore, joined May 2001, 1971 posts, RR: 3
Reply 10, posted (10 years 8 months 3 weeks 5 days 21 hours ago) and read 5817 times:

How can Singapore with a population of 4 million people support SIA, SilkAir, Air Asia Singapore, TigerAir, ValuAir and the new Qantas startup?

And Temasek Holdings will have a stake in both the Qantas airline and Tiger Air, SIA (and therefore Silk Air). Which means Temasek will be linked to 4 Airlines currently operating out of Singapore. And Temasek will never allow their own companies to fail. Which means Air Asia SIngapore and ValuAir will go.


User currently offlineDocpepz From Singapore, joined May 2001, 1971 posts, RR: 3
Reply 11, posted (10 years 8 months 3 weeks 5 days 21 hours ago) and read 5794 times:

And for those of you following the saga in Singapore you will know that the Singapore govt is desperate for Changi to remain a air hub in Asia. And they will do it at all cost, even if it means sacrificing SIA.

Pretty stupid I think, since a strong SIA is necessary for a strong SIN hub. QF and BA and EK are probably laughing and milking all they can from an insecure Changi Airport.

BA and QF are not interested in bringing people to Singapore. They are interested in taking them to Europe. BA/QF/EK don't have Singapore stopover packages. They are just interested in squeezing all they can out of Changi Airport. If I were Dixon or Eddington I would be laughing and laughing and LAUGHING at SIN for offering me such a sweet deal.

Next, we cannot have LCCs crowding the skies of Changi. If Changi is swarmped by LCCs, we might become the LCC hub while KUL and BKK might develop into the inter-continental hub that SIN has always been. SIN CANNOT be a LCC hub AND an inter continental hub at the same time. Don't these people GET IT????

Anyhow, ever since Cheong left, SIA has been in the pits. Chew Choon Seng is spineless and hasn't a clue how to run his airline, which is why the Senior Minister (the erm, elected dictator lee kuan yew) had to step in. If his management was a bit more competent the government would have left its hands off SIA as it did in the past 30 years. For the past 30 years SIA had strong, able CEOs able to run their airline effectively and at the same time telling the govt to back off. And the govt DID back off cos Cheong and Pillay were competent CEOs and Chairmen

But then again we're a small nation surrounded by giants and have always been insecure. Which is why we must always compare other countries to us and reassure ourselves that we're better!

That's all for now, from your insecure Singaporean A.net member!

From the straits times:

===================

Defending Changi

Competition in ground handling will help ensure airport's survival, workers told

By Rebecca Lee

FEAR is emerging among workers at Singapore's two ground-handling companies that they will lose their jobs or suffer pay cuts when competition hots up with the entry of a third player.


GAME PLAN

Changi's plans for defending its position as an air hub:

1 Providing airport capacity which can meet expected demands and cater to the different needs of airlines

2 Maintaining high airport standards, with good customer service for passengers and airlines

3 Keeping airport charges competitive


But Civil Aviation Authority of Singapore (CAAS) director-general Wong Woon Liong feels that is because they do not see the bigger price Singapore may have to pay.

Eventually, their worries may be unfounded, as Mr Wong foresees growth and job creation when a new player comes in to rival Changi International Airport Services (CIAS) and Singapore Airport Terminal Services (Sats), which is 87 percent-owned by Singapore Airlines.

And yesterday, he presented his optimistic picture to leaders of unions in the SIA Group, when he outlined plans to enhance the 'total Changi experience' to attract more passengers and airlines.

Ground-handling cost, he said, is an important component for airlines. To reduce it, Changi needs to introduce greater competition.

The new entrant, likely to be an international player, will inevitably squeeze margins at Sats and CIAS, so it is understandable that staff of these companies may fear job losses or pay cuts, he said.

But they will be worse off, he added, if competition is kept at bay, as airlines may pull out altogether if charges are unattractive, even though current charges are the lowest in Asia after Malaysia.

However, 'if the price is right', more airlines will be drawn to Singapore, creating more jobs, Mr Wong said.

Senior Minister Lee Kuan Yew also told union leaders the reality of what a new player meant for workers.

'Whether it is Gate Gourmet or LSG Sky Chefs, these are world franchises, they operate in many countries, many airports.

'They may be cheaper than Sats and CIAS, so it's not possible to carry on as if Sats is still part of SIA,' he said, adding that salaries and benefits will have to be adjusted.

Mr Wong also outlined plans to keep Changi competitive and fend off the threat posed by new long-range aircraft.

These planes allow passengers to bypass Singapore and choose from a wider range of airports, stretching as far as Dubai.

Singapore also faced increasing competition from regional airports, particularly Bangkok, which is better positioned to serve both the Europe-Asia and Europe-Australia routes, and has a strong home carrier in Thai Airways.

Changi will thus have to focus on the fundamentals: 'Offer a service better than our competitors at the right price', said Mr Wong.

'To airlines, we need to roll out the red carpet.

'To passengers, Changi shall remain both hassle-free and, for those passengers that need to connect, we shall give them more choices for them to enjoy their time here,' he said, adding that these include free city tours and extensive shopping facilities.

Changi's two terminals are also getting a $420 million facelift, while a third one is being built at a cost of $1.75 billion.

It is also prepared to build a terminal for low-cost carriers to capture this growing market. 'Low-cost carriers, with their focus on removing frills, will challenge our way of doing things,' Mr Wong said.

To better understand how to meet their needs, CAAS sent teams to study how other airports do it and its director (airport management), Mr Yam Kum Weng, yesterday gave a report of what he found at Britain's Luton airport, the home of EasyJet, and Stansted airport, Ryanair's base.

There, aircraft are used more intensively by low-cost carriers, and operations are well-coordinated and kept simple to reduce turnaround time.

'They do not clear the toilet waste or do extensive cleaning of the cabin at each turnaround. Staff also multi-task,' he said.

So ground-handling staff do everything, from loading luggage to clearing rubbish bags, and even cabin crew have to multi-task.

Besides cleaning the cabin, the crew guide passengers to the terminals and help to check them in.

'We must offer more - the total Changi experience of being safe, hassle-free and comfortable,' he said. 'Our airport staff not only need to be friendly, they must also go that extra mile for passengers to delight customers.'




User currently offlineRyanair!!! From Australia, joined Mar 2002, 4757 posts, RR: 25
Reply 12, posted (10 years 8 months 3 weeks 5 days 20 hours ago) and read 5745 times:

And for those of you following the saga in Singapore you will know that the Singapore govt is desperate for Changi to remain a air hub in Asia. And they will do it at all cost, even if it means sacrificing SIA.

Dude... pretty emotional comments there... But I would have to correct this point though. The government would not let SIA fold because in order for Changi to maintain its status, SIA (the biggest spender there) would need to be kept afloat.

Why do you think our dear "dictator" was so agitated with the whole pilot saga? Even going to the extent of revoking CPT Ryan Goh's PR status? Jesus... I have a feeling SIA won't employ me as my name rhymes so much with his! Hahaha...





Welcome to my starry one world alliance, a team in the sky!
User currently offlineDocpepz From Singapore, joined May 2001, 1971 posts, RR: 3
Reply 13, posted (10 years 8 months 3 weeks 5 days 20 hours ago) and read 5728 times:

Ryanair, the "sacrificing SIA" part was said by the dear Senior Minister himself, not me.

The Senile Minister is basically old and bored.

Next, you have an incompetent SIA management. Why was it DEAR LEADER himself who announced SIA's sale of SATS, and not Chew Choon Seng? Chew obviously doesn't know how to run his airline. For years and years the govt kept their hands off SIA and they became what they are today.

And look, Temasek has a higher stake in the proposed QF Airline (19%) than TigerAir (11%) Obviously they do mean it when they say they want to sacrifice SIA to maintain Changi's "Hub" status.

If things go as planned, Changi Airport will be the new Stansted of Asia and Temasek would have sold its stake in SIA to QF and Dixon and Eddington will be the last ones laughing. And yes, we would all be pleased that Changi would retain its air hub status.








User currently offlineMAS747 From Malaysia, joined Mar 2004, 88 posts, RR: 2
Reply 14, posted (10 years 8 months 3 weeks 5 days 20 hours ago) and read 5715 times:

I agree with you Docpepz, with the Singapore government wanting all air traffic to go via Changi, while LCC's would want to go to one of Singapore's other airports, Seletar etc which the government doesnt want.

The LTA of Singapore also didn't give a license to Comfort Buses to ferry passengers from Senai Airport in Johor to Singapore.

I don't think that Changi Will lose its intercontinental Air Hub status to KLIA as much as I would like to because BA/QF and the other Star Alliance airlines wont desert Changi, Other airlines might be tempted to go across the border to KLIA where the fees are much cheaper.

I don't understand why QF wants to set a Hub in Singapore for its LCC,
1, its more expensive for the other travelers of other Asian nations because of the high exchange rate as Singapore has one of the better economies around.
2, Ground costs will be more expensive compared to KLIA etc
3, Competiton!!! isnt 3 LCC's enough? do we really need 4?

And changi is crowded as it is, how long before they run out of space for expansion? Singapore isnt that big an Island is it?

just my two cents


User currently offlineSydscott From Australia, joined Oct 2003, 3189 posts, RR: 20
Reply 15, posted (10 years 8 months 3 weeks 5 days 20 hours ago) and read 5720 times:


"BA and QF are not interested in bringing people to Singapore. They are interested in taking them to Europe. BA/QF/EK don't have Singapore stopover packages. They are just interested in squeezing all they can out of Changi Airport."

They are interested in bringing people to Singapore. Large numbers of passengers enjoy stopovers in Singapore. But the QF hub is designed as a major connecting hub for flights between Australia and Europe. The LCC will fill the gap in the Oneworld network for a South East Asian Carrier providing O&D traffic. If anything this will bring more people through and to Singapore rather than less.

"Next, we cannot have LCCs crowding the skies of Changi. If Changi is swarmped by LCCs, we might become the LCC hub while KUL and BKK might develop into the inter-continental hub that SIN has always been. SIN CANNOT be a LCC hub AND an inter continental hub at the same time."

Why not??? Look at LAX. That has all manor of airlines operating through it from LCC's to major inter-continental carriers.

"And for those of you following the saga in Singapore you will know that the Singapore govt is desperate for Changi to remain a air hub in Asia. And they will do it at all cost, even if it means sacrificing SIA."

Comparing SQ to the likes of MAS and Thai is a bit unfair. I dont think SQ is going anywhere any time soon and it's by far the most respected South East Asian Airline. It has a very strong passenger base from Australia and New Zealand as well as Singapore to draw from and is teh main competitor for Europe-Australia traffic to Qantas. SQ wont fold anytime soon and I doubt your government would let it fold in any case.


User currently offlineSydscott From Australia, joined Oct 2003, 3189 posts, RR: 20
Reply 16, posted (10 years 8 months 3 weeks 5 days 20 hours ago) and read 5702 times:


"1, its more expensive for the other travelers of other Asian nations because of the high exchange rate as Singapore has one of the better economies around."

The economy is exactly why you set up the LCC there. A stronger economy means a larger passenger base willing to pay for air travel.

"2, Ground costs will be more expensive compared to KLIA etc"

But QF doesn't fly to KLIA and only has a small presence in Thailand. Singapore would be the only place they would consider as a hub.

"3, Competiton!!! isnt 3 LCC's enough? do we really need 4?"

Competition is a fantasy. In the end it will be QF's LCC vs SQ's LCC and the others will disappear simply because they dont have access to big brothers pockets. A cosy LCC duopoly.


User currently offlineQantaspower From Australia, joined Aug 2002, 516 posts, RR: 7
Reply 17, posted (10 years 8 months 3 weeks 5 days 20 hours ago) and read 5687 times:

MAS747,

The idea is not just to bring people to Singapore but also connect them onto Australia and Europe via QF's Changi hub.

The new LCC will market Australia heavily and put themn on QF or Australian airline flights.

Next will be taking a stake in Air New Zealand then the Australian Govt will grant both Cathay and Singapore the right to one flight per day to the US.

QF will of course then begin to fly Hong Kong To London and who knows maybe Singapore to LAX.

Regards

QANTASpower


User currently offlineFuffla From Australia, joined Feb 2004, 401 posts, RR: 0
Reply 18, posted (10 years 8 months 3 weeks 5 days 20 hours ago) and read 5684 times:

Arn't we forgetting Vietnam Airlines and Thai Airways low cost airlines? These should add more competition to the many locw cost carriers currently opperating in Asia.

User currently offlineQF744 From Australia, joined Feb 2004, 415 posts, RR: 1
Reply 19, posted (10 years 8 months 3 weeks 5 days 20 hours ago) and read 5674 times:

docpepz,
are you serious with your comment that QF/BA/EK don't have stopober packages in Singapore?
If you lived in Oz, you would see that all three have stopover packages!
Cracking jokes?
QF744



IT'S ALL ABOUT THE UPPER DECK
User currently offlineRyanair!!! From Australia, joined Mar 2002, 4757 posts, RR: 25
Reply 20, posted (10 years 8 months 3 weeks 5 days 19 hours ago) and read 5653 times:

I guess what competition means is the allowance to have as many players as possible in the market. The strongest will survive. Therefore, it doesn't matter that there will be Tiger, Valuair, Air Asia and what have yous...

Let the battle begin and it is us - the consumers - that stand to gain with the price war!



Welcome to my starry one world alliance, a team in the sky!
User currently offlineSingapore_Air From United Kingdom, joined Nov 2000, 13745 posts, RR: 19
Reply 21, posted (10 years 8 months 3 weeks 5 days 19 hours ago) and read 5607 times:

This is an outrage.

So much for free trade(!) Once again when it comes to aviation, Singapore Government has shown that it will allow any kind of company into the lucrative Singapore market without reciprocal agreement. Aren’t we supposed to be an arrogant country?

Singapore Airlines Limited CEO Chew Choon Seng is powerless at the moment to stop the interference of Senior Minister Lee “Con You”. The Airline is in a state of flux. Union disagreements are being ironed out however, (thanks to the aforementioned Senior Minister) who has to SIA’s advantage admittedly taken the situation under control and moved it along with swift and decisive action.

From an SIA position and supporter, I consider LCCs a scourge in the market. I can only hope that Tiger Airways will crush the competition and dismantle itself so that we can go back to the old status quo. These so-called LCCs will divert money away from SIA profits. Infidels.

An article in Singapore’s TODAY newspaper also had something interesting to say about it. While the Government jumps on the LCC bandwagon, won’t we have crowded skies while small LCC narrow bodies clog up the sky while large wide-bodies – essential for the hub status of Changi are made to wait?

Singapore Airlines Limited have always been at a disadvantaged position as the Government pursues its liberal and over-liberal in my opinion Open Skies policies. Never has the Government supported the Airline financially or from an operational point of view. The Airline is tired. Singapore does not ‘need’ four LCCs. Chew looks visibly tired on Channel News Asia from the interference of evil forces outside and also having to suck up to the Senior Minister.

I am perplexed. For SIA to survive sustainably – making a net profit of S$1.6 billion a year – it is necessary to do everything to combat the Singapore Government, Temasek Holdings and these stupid LCCs in the market. A very complicated, time consuming and downright hard task. This will be the most challenging period in SIA’s history for the management team and at the moment, they need a more proactive and hardline strategy. Tiger Airways must not only be an LCC. It should also be an Airline heavily cross-subsidised to crush all the LCC competition to such an extent that the mother company can return the market to the good old days – where we can milk it for all its worth!



Anyone can fly, only the best Soar.
User currently offlineBusinessflyer From Singapore, joined Aug 2001, 288 posts, RR: 0
Reply 22, posted (10 years 8 months 3 weeks 5 days 18 hours ago) and read 5543 times:

Am too surprised that SM announced the possible sale of SATS and not SIA's management - although hasn't this been a possibility since 1999? I know 57% of SIA is government owned, but isn't the role of managers to maximise shareholder value and if they are not doing so, shareholders should then remove management - i.e. it is rare for shareholders to actually dictate commercial strategy and what about all the minority shareholders? Do they think it is a good idea for SIA to exit SATS?

Anyway, as for QF entering the market, this is clearly excellent news for them but worrying for SQ. What is even more worrying for SQ is the potential Competition Law that MTI are working on. From what I understand is that this will introduce asymmetric regulation, i.e. identification of dominant operators in defined markets with subsequently defined prohibitions and obligations. In most other markets, these obligations include prohibitions of cross-subsidisation, so if applied in Singapore and to SQ, could prevent large-scale cross-subsidisation of Tiger Air.

I was talking to somebody from CAAS recently and they were saying that there was real concern that Changi was in danger of potentially losing its hub status - especially to BKK. These measures are probably an attempt to pre-empt such a development.

SQ's share price is only down 1% at latest count. Shareholders don't seem to be counting the stock down too much...


User currently offlinePilatusguy From Switzerland, joined Jan 2004, 315 posts, RR: 0
Reply 23, posted (10 years 8 months 3 weeks 5 days 18 hours ago) and read 5544 times:

Let me throw in another thought.
I have never worked for an airline so you'll probably correct me on this one.
When I was working for a large insurance company we were also looking at setting up a "south east asian center" for our ops. The reason why they elected Singapore is because of it's (apparent) better educated people, compared to Malaysia or even HK.

Could this be a reason to base an airline in Singapore?

PS: Above is just the facts what our execs were thinking... I personally do not agree with that statement though....


User currently offlineKrisworldB777 From Australia, joined Nov 2000, 571 posts, RR: 3
Reply 24, posted (10 years 8 months 3 weeks 5 days 17 hours ago) and read 5476 times:

I wholeheartedly echo the sentiments pertaining to SM Lee’s rather sudden intervention in SIA’s affairs and do question how the constitution of the company facilitates it.

What concerns me is the agenda of SM Lee and how this could and ultimately will affect SIA’s shareholders. Whilst Temasek does indeed hold a significant 56% stake in the airline, it is important to remember that 44% of the company is not. SATS represents a sizeable asset and income stream in the SIA group’s market capitalisation of $15-billion SGD so it is fair to say that serious dollars are being played with, raising the question of where in fact the pressure to sell comes from.

If the decision to sell SATS has been made by SIA management and the board, I would reserve less concern. However, should it have been made by Mr Lee, I view that as an exceptionally serious breach of shareholder trust, particularly from a man who has nothing in the way of real management experience in the airline industry. I am inclined to believe that the sale of SATS has been instrumented by the latter and would go so far as to voice my opinion of the situation as being a gross misjudgement for SIA given that the airline will undoubtedly lose strict control over significant operational costs that will continue to be incurred. Further, SIA’s corporate philosophy, particularly under Cheong Choong Kong, was to broaden the airline’s operational base, embracing the age-old adage of ‘don’t put your eggs in one basket’ Over the course of history, and as we head for yet more turbulence in the aviation industry, I feel that the more diverse SIA’s income streams, the better, although so many company CEOs are so quick to criticise that judgement.

Singapore’s traditional government philosophy towards aviation has been visionary over the course of the last twenty years. Indeed, the words stellar come to mind from a commercial point of view, and few argue with Temasek’s famously good business acumen. This week, however, has sent clear signals of a change in thinking and a change it is, from the outside at least, and it certainly appears as if the government is thrashing around like a drowning fish trying ever so hard to swan money around in each and every direction in the hope that one of many projects will pay dividends. Time shall tell but I do fear that any further weakening at SIA will through not only the aviation industry but the whole Singaporean economy into chaos. It is worth remembering that it was Singapore who went to Qantas with this “great idea” according to an exceedingly jovial Geoff Dixon today.

Focussing on Singapore being a long-term hub is an admirable objective, in theory at least. The SM’s comment of “sacrificing SIA” though is a voucher for tyranny. Singapore has only formulated itself as being a true hub because of the success of SIA. It is SIA that brings passengers from far and wide and I don’t think that will change any time soon, particularly in Asia where SIA continues to expand admirably. However, within the next ten years, it is inevitable that Singapore and other Asian hubs are going to become obsolete as ultra long-haul flights like Australia to Europe and vice versa become more prevalent. This will hurt SIA and in many respects, it was that principle objective that was such a mitigating factor in the decision to pursue investments in Virgin Atlantic and Air New Zealand.

The government is trying far too hard to control SIA’s destiny. Unfortunately though, Chew is a man who has been in the shadow of Cheong Choong Kong for thirty years. Whilst strong in intellect, it is clear that he is at ends to find new ways for SIA to expand and continue to conquer. Couple that with the government’s philosophy and the new-found fetish for low cost carriers, and we have blood – some of which may be coming from the tail of Qantas’ aircraft.


25 Ryanair!!! : Could this be a reason to base an airline in Singapore? Well, that and coupled with that fact that QF has had many historical links with Singapore. Lo
26 Travel : I would love it if Singapore Airlines came into the Australian domestic market to set up a fully serviced carrier and at the same time put Virgin Blue
27 TBCITDG : Travel, Even though that sounds like a plan, the market would not be able to sustain 4 airlines. Either one or two would go belly up, and somehow I th
28 Aussie747 : Ah... I can see it now... SQ will now get SYD-LAX.
29 Jeffrysky : while some argue that the interests of SIA are at stake, i think we must really take things into perspective : an excellent LCC network strengthens th
30 ANstar : I think it's rather ironic that SQ have been talking about setting up an airline/taking a major stake in an airline in Australia for years..... yet QF
31 Airbus Lover : Well I might be wrong but even AirAsia belives Singapore can only support 2 LCCs at the beginning (simultaneously). With QF in the show now, I really
32 Aerohottie : I perosnally believe that SQ must get into domestic Australia, and battle with QF for a stake in NZ. Having NZ takes New Zealand out of the equation,
33 QF744 : remember SQ looked at going into the Australian domestic market, then decided not to. also look at the open skies agreement with Australia and Singapo
34 ClassicLover : Agreed on Australia not giving SQ any more rights. You must remember that this Asian LCC is majority owned by Singapore business interests. As such, i
35 Docpepz : Geoff Dixon must be laughing. The winner of this whole thing is Qantas. Singapore Changi Airport has demonstrated how insecure it is by saying "we mus
36 B727-200 : Here's something completely ironical for you all. The two LCC's that Qantas have proposed / established are both headed by ex-Ansett senior managers
37 Aviasian : Wow, some pretty emotional remarks we have here. Airbus Lover: " Pride.... and Singapore... they will do watever to have that. " The Asian version of
38 Wirraway : Wed "Straits Times" (Singapore) Big boys seem to have the edge Transport Ministry says it will give preference to airline that will best benefit count
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