Marara
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QF To Take On SIA In Asia If SQ Gets Aus-US Rights

Mon Aug 18, 2003 3:20 pm

Qantas eyes Singapore hub
By Scott Rochfort
August 18, 2003
http://www.smh.com.au

Qantas plans to investigate the viability of establishing a low-cost operational hub in Singapore as the Australian and Singaporean governments prepare to resume talks over a long-awaited open skies agreement on September 22.

With Singapore Airlines keen to secure rights to fly the high-yielding Australia-US route, Qantas is understood to be working on battle plans to take the fight to Singapore Airlines in its home port.

Qantas and major shareholder British Airways already have "seventh-freedom" rights which allows them to set up bases in Singapore. Talk of Qantas's plan - dubbed Operation Calypso - reignited last week when the Flying Kangaroo revealed plans to restructure its various operations into separate business units.

In a move reminiscent of the Singapore Airlines restructure several years ago, the Qantas units will include aircraft operations (covering engineering and crew), maintenance, freight, catering, the Qantas airline and the Cairns-based budget carrier, Australian Airlines.


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It is understood the Qantas airline will be divided into International (Asia, Europe and the Americas), Domestic, City Flyer, Leisure and, significantly, Asia.

It is the additional "Asia" segment that has raised talk of a possible move into Singapore.

The speculation comes as Qantas and Air New Zealand get a final opportunity to put their case for an alliance to the New Zealand Commerce Commission. A five-day hearing in Wellington starts today, with Air New Zealand's Ralph Norris and Qantas chief executive Geoff Dixon due to address the commission.

The hearing adds to a hectic week for Qantas. The airline is expected to report on Thursday a full-year profit for 2002-03 of around $348 million, down $80 million from a year ago due to a drop in demand caused by the SARS crisis and the Iraq war.

Qantas public affairs manager Michael Sharp said he was unaware of plans for a move into Asia.

But with Qantas set to cut labour and maintenance costs by diverting 25 per cent of its trans-Tasman capacity through its New Zealand subsidiary, Jet Connect, a move to Singapore could help Qantas lower costs to Europe and Asia through what is its largest international hub. The main obstacle could be the response of the 14 unions that cover its workforce.

Singapore Airlines said it would "naturally not stand in the way" if Qantas set up a base at Changi Airport.

"For a long time we have opposed protectionism and championed liberalised markets because we believe it brings out the best in all of us in the industry," Singapore Airlines public affairs manager Innes Willox said.

"We have never sought to block or oppose any carrier from competing against us anywhere because that is not our style. Any consumer or in-bound tour operator in Australia would agree that competition can only be good for anybody who wishes to travel anywhere by air," he said.

Singapore Airlines has held off setting up a third domestic carrier in Australia as the SARS crisis and Iraq war battered the aviation industry. However, the airline's Sydney-based spokesman, Stephen Foreshaw, said the plans were back on the radar.

Centre for Asia Pacific Aviation consultant Ian Thomas said the main obstacle for Singapore Airlines would not be costs, given the relatively small amount of cash for Virgin Blue to take off, but access to Sydney Airport.
___________________________________


Sounds really interesting. This would give QF an even stronger position in Oneworld, they would be the south east asian & australia partner.
I like work: it fascinates me. I can sit and look at it for hours. Jerome K Jerome
 
BD1959
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RE: QF To Take On SIA In Asia If SQ Gets Aus-US Rights

Mon Aug 18, 2003 3:32 pm

Marara:

This would give QF an even stronger position in Oneworld

The first sentence of the article outlines QANTAS setting up a LCC at Changi - doesn't Australian Airlines in effect operate outside the Oneworld Partnership? In which case how would a QF LCC strengthen its role within Oneworld?

BD1959
 
Marara
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RE: QF To Take On SIA In Asia If SQ Gets Aus-US Rights

Mon Aug 18, 2003 3:45 pm

Low cost doesn't mean no-frills. I'm sure that if QF's new Asia airline (QF likes reviving old airline names lately, how about Australia Asia? :P) follows the Australian Airlines model of Low Cost not No-Frills we will see it co-operate in OW. Maybe not as a full member but as an associate a bit like QFLink.

I like work: it fascinates me. I can sit and look at it for hours. Jerome K Jerome
 
BD1959
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RE: QF To Take On SIA In Asia If SQ Gets Aus-US Rights

Mon Aug 18, 2003 3:53 pm

QFLink is in effect "QANTAS Regional" with full inter-operational benefits. OZ is more of an "arms length" operation which happens to be owned by QF.

BTW: I agree fully the OZ does not equate to no-frills, and also agree with the resurection of the Australia Asia Airlines name - it all this was to happen.

Personally, I think this is just fillibuster to try to disuade SQ from the Australia-US route by threatening to attack in SQ's home port. Interesting that SQ are stepping up to the mark!!!

BD1959
 
9V-SVE
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RE: QF To Take On SIA In Asia If SQ Gets Aus-US Rights

Mon Aug 18, 2003 4:10 pm

Well...QF already flies SIN-HKG...  Big grin
 
AJ
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RE: QF To Take On SIA In Asia If SQ Gets Aus-US Rights

Mon Aug 18, 2003 4:58 pm

9V-SVE, "Well...QF already flies SIN-HKG...", this was dropped during SARS with QF77/78 operating PER-SIN-PER. With reinstatement of Hong Kong flying this sector was axed as being low yield.

In years past Qantas used to operate with great loads on the Golden Triangle, SIN-HKG-BKK.
 
rupertvander82
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RE: QF To Take On SIA In Asia If SQ Gets Aus-US Ri

Mon Aug 18, 2003 9:08 pm

I suspect that the talk about setting up a LCC in Singapore by Qantas is to threaten SIA from setting up routes between Australia and USA. Which of course, makes QF look terrible. What's up with the paranoia? If you have a good and consistent product, then in truth, there shouldn't be much to fear!
 
StarFlyer
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RE: QF To Take On SIA In Asia If SQ Gets Aus-US Rights

Mon Aug 18, 2003 9:20 pm

Rupertvander82,
SYD-LAX is one of the worlds most lucrative routes but is only served by QF and UA. If another competitor enters that market there wont be as much money to be made, particularly if its an airline with like SQ with a good service reputation.
This is why QF is scared of them, and tries threatening SQ, as you were saying already.
Yours truly - StarFlyer
 
N79969
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RE: QF To Take On SIA In Asia If SQ Gets Aus-US Rights

Mon Aug 18, 2003 9:37 pm

NZ also flies SYD-LAX, correct?
 
StarFlyer
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RE: QF To Take On SIA In Asia If SQ Gets Aus-US Rights

Mon Aug 18, 2003 10:35 pm

NZ stopped flying LAX-SYD earlier this year I believe.
Yours truly - StarFlyer
 
chrisrad
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RE: QF To Take On SIA In Asia If SQ Gets Aus-US Rights

Mon Aug 18, 2003 10:35 pm

Not any more, only via Auckland
Welcome aboard Malaysia Airlines! Winner of Best Cabin Staff 2001,2002,2003,2004,2007,2009,2012
 
Ex_SQer
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RE: QF To Take On SIA In Asia If SQ Gets Aus-US Rights

Tue Aug 19, 2003 5:38 am

Personally, I think this is just fillibuster to try to disuade SQ from the Australia-US route by threatening to attack in SQ's home port. Interesting that SQ are stepping up to the mark!!!

Agreed, this is sabre rattling more than anything else. It'll be very hard to set up a competitive LCC - even for SQ - based in SIN because of SIN's relatively high labour and other operating costs.

The fact that SQ is "stepping up to the mark" shouldn't surprise anyone. SQ's (and SIN's) official stance is that it is against protectionism and it welcomes open and fair competition.


Qantas and major shareholder British Airways already have "seventh-freedom" rights which allows them to set up bases in Singapore.

Does QF already have these rights? Since when, and under which bilateral? AFAIK only BA had seventh freedoms out of SIN.

 
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VirginFlyer
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RE: QF To Take On SIA In Asia If SQ Gets Aus-US Rights

Tue Aug 19, 2003 10:49 am

Might I suggest everyone re-read the first paragraph of the article. it actually says nothing about setting up a Low-Cost Carrier based in Singapore. It actually says they are looking at setting up a low-cost hub. for the airline in Singapore. This is would appear to be a similar concept to on JetConnect on the Tasman - operate the airline out of a city with cheaper labour, while the end product remains the same to the customer.

By setting up a base in Singapore, Qantas is able to lower its costs without making any significant changes to the airline's service standards. They are also able to serve more destinations in Asia.

V/F
"So powerful is the light of unity that it can illuminate the whole earth." - Bahá'u'lláh
 
aviasian
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RE: QF To Take On SIA In Asia If SQ Gets Aus-US Rights

Tue Aug 19, 2003 11:53 am

I am personally amazed that Qantas has not made greater use of Singapore for intra-Asian routes. The triangle operation to Bangkok and Hong Kong wasn't particularly strongly marketed (certainly not in the Singapore market).

Try going to any Thai travel agent and ask for a ticket to Hong Kong . . . you get a whole bundle of offers and yet no mention of Qantas (of course refering to the time when QF still operates between these cities).

A prime example is the Singapore-Bombay route . . . a gold-mine, considering how restrictive the Indian government is in giving out traffic rights. Qantas easily displaces the two Indian carriers that compete with SIA on this route as an airline of choice.

It is time Qantas looks at how to treat Singapore as "an Australian city" for the purpose of a hub and spoke operation . . . though I must admit that the potential for SIA to do the same in Sydney is much lower.

KC Sim
Bangkok
 
danialanwar
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RE: QF To Take On SIA In Asia If SQ Gets Aus-US Rights

Tue Aug 19, 2003 12:58 pm

the SIN-BKK-HKG trip was meant to offer connections. SIN-HKG to offer Australia-SIN-HKG connex (like from PER, ADL, BNE, CNS, DRW). The HKG-BKK connected to QF flights BKK-LHR, BKK-FRA, BKK-FCO
Best Business Class: Royal Brunei. Best Economy: Singapore Airlines. First: please send money first!
 
QANTASpower
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RE: QF To Take On SIA In Asia If SQ Gets Aus-US Rights

Tue Aug 19, 2003 7:41 pm

The SYD to LA route is one of the most lucrative in the world .... yes mate .... just ask Air New Zealand, Continental and American.
 
tsentsan
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RE: QF To Take On SIA In Asia If SQ Gets Aus-US Rights

Tue Aug 19, 2003 8:48 pm

There was an interesting article today in the ST thats related to this..

http://straitstimes.asia1.com.sg/money/story/0,4386,205435,00.html?
Qantas not planning an operational hub in S'pore

WELLINGTON - Qantas Airways is not planning to establish an operational hub in Singapore to cut costs on routes to Europe or other Asian cities, chief executive Geoff Dixon said yesterday.

Qantas, Australia's biggest carrier, said last week it plans to revamp itself into three separate businesses.

The units will be divided into a number of segments, including one focused on Asia and which may be based in Singapore, the Sydney Morning Herald reported earlier yesterday, without saying where it got the information.

The report is 'untrue', Mr Dixon told a conference convened by New Zealand's antitrust regulator - the Commerce Commission - on a proposed alliance between Qantas and Air New Zealand (Air NZ). He did not elaborate.

Moving to Singapore would lower labour and maintenance costs, the newspaper said. It may hinge on support from Australian unions, it added.

But Qantas public affairs manager Michael Sharp was quoted by the newspaper as saying that he was unaware of plans to open a hub in Singapore.

At the conference, Air NZ pleaded for approval by the antitrust regulator of its alliance with Qantas, warning that without the move, it could collapse within three to six years.

In April, the commission and its Australian counterpart issued a preliminary rejection of the alliance move, branding it anti-competitive.

But the commission is now taking more evidence from interested parties before making a final ruling late next month on whether to allow the tie-up.

Air NZ chief executive Ralph Norris warned that Qantas will become increasingly more aggressive in the domestic market, and noted that Virgin Blue Airlines is set to start services on key routes with a budget-airline model. Virgin Blue is Australia's second-largest airline.

When two full-service airlines such as Air NZ and Qantas are joined by a budget airline in a market, 'only one full-service airline can expect to survive', he said.

Mr Dixon of Qantas told the conference that should the alliance not proceed, Qantas would expand its local business to compete with Air NZ.

The Sydney-based airline's Jet Connect unit, which has hired 80 workers and is based in New Zealand, will start flying to Australia from next month, he said.

'We are getting our cost base correct, we will grow the business and we will take market share,' he said.

Air NZ should expect aggressive competition because 'that's the way we go about our business everywhere'. -- Bloomberg News, AP


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aussie747
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RE: QF To Take On SIA In Asia If SQ Gets Aus-US Rights

Tue Aug 19, 2003 9:16 pm

Whether they set up and expand their Singapore Hub, Qantas already has Cabin Crew based in Singapore, however I think the Singapore based crew has been reduced significantly because of SARS / Iraq war, and as a result there may not be anybody based at the moment - not sure.

I will also say that in the tough times of June 2003 half and of all the routes QF opearated that made profit 30% of total profits just came from SYD-LAX!!

So the article does not phase me in any way.
 
JGPH1A
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RE: QF To Take On SIA In Asia If SQ Gets Aus-US Rights

Tue Aug 19, 2003 9:23 pm

P.S. Australian Airlines carrier code is not OZ - it's AO. OZ is Asiana.

And AO is not THAT much of an arms length operation, most of the reservations, distribution and ground-handling for AO is done by QF.

(Pendantic but true).

[Edited 2003-08-19 14:26:09]
Young and beautiful and thin and gorgeous AND BANNED ! Cya at airspaceonline.com, losers
 
Marara
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RE: QF To Take On SIA In Asia If SQ Gets Aus-US Rights

Thu Aug 21, 2003 9:35 pm

Do QF have a crew base in SIN ? ii thought they only had one in BKK.
I like work: it fascinates me. I can sit and look at it for hours. Jerome K Jerome
 
9V-SVE
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RE: QF To Take On SIA In Asia If SQ Gets Aus-US Rights

Thu Aug 21, 2003 10:59 pm

Well, all QF flights to Europe except one to London (via BKK) transit SIN, and you still have dozens of flights coming from Australia and back, so yes, I imagine they would have a sizeable base there (Probably second largest internationally after LAX).
 
Marara
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RE: QF To Take On SIA In Asia If SQ Gets Aus-US Rights

Thu Aug 21, 2003 11:40 pm

I know that nearly all QF's EU flights go via SIN but i didnt think they had any crew based there. I know QF used to have a BKK base a while ago but i think its been shut down now ( i think it was only for Thai speakers).
I like work: it fascinates me. I can sit and look at it for hours. Jerome K Jerome

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