scotron11
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Qantas: Star Alliance

Tue Sep 14, 2004 1:01 pm

Story in FT regarding QF's future and their plans for expansion in Asia. Seems all is not rosy between QF & BA, despite what both of them say.

Apparently BA was surprised when QF snapped up 4 slots at LHR and QF was surprised when BA sold its stake in QF. Additionally, QF's plans for the so called "Kangaroo Route" are through HKG and BOM where it will compete directly with BA on those sectors. Furthermore, it seems QF want to forge a partnership with SQ in the operation of the A380, plus expanding their presence at Changi, which is their largest operation outside Australia. Coupled with the low-cost carriers they are setting up to be based in Asia in partnership with the largest shareholder in SIA, there could be a very good reason for them to quit OneWorld and join Star.

Food for thought. folks!
 
777ER
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RE: Qantas: Star Alliance

Tue Sep 14, 2004 1:22 pm

Also with QF and NZ determinded to form an alliance it might make sense for QF to join the Star Alliance.
 
Carpethead
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RE: Qantas: Star Alliance

Tue Sep 14, 2004 1:31 pm

Interesting study. Bring it on.
 
Trolley Dolley
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RE: Qantas: Star Alliance

Tue Sep 14, 2004 1:37 pm

What's to say that this isn't a sign that SQ is going to quit Star and join oneworld?

The Joint Service Agreement (JSA) between QF and BA on the Kangaroo route is very strong. Basically it removes the competition between the two carriers as they pool the revenue on the route. A BA rep told my travel company once that it actually doesn't matter which flight a pax goes on as the revenue is split anyway. Don't forget that BA/QF have a joint relationship that goes back for decades to the dawn of intercontinental travel.

Joint maintainence agreements between competing airlines are nothing new, many were formed at the start of the 747 era. eg KSSU (KLM, Swiss, SAS and UTA) for the DC10. Indeed 777er, how much maintainence does NZ perform for QF?

QF can benefit from Changi because of the open skies agreement and the pro-competition policies of the Singaporeean governement.

Its also worth remembering that the US routes are vital to QF. Star currently offers three airlines that are in various forms of bankruptcy protetction in North America, but oneworld offers the more secure AA. This on carriage is crutial to QF.

The key factor will be consumer watch dogs and whether a change of alliance would be demeed anti-competitive.

My 2cents worth is that I don't think the QF/BA alliance is going to come undone quickly, but it will change.
 
QANTAS077
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RE: Qantas: Star Alliance

Tue Sep 14, 2004 1:40 pm

rumbles that have been floating is that QF may join star, just a rumour that's been going around! ears to the ground in the coming months!
 
ETStar
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RE: Qantas: Star Alliance

Tue Sep 14, 2004 1:42 pm

Read the full story at http://news.ft.com/cms/s/c1860d58-05ae-11d9-bff2-00000e2511c8.html. For some reason the comments made by Dixon do have a tone that suggests there might be more going on, as in a rift between the two airlines.... especially after reading "There are some tensions coming into the relationship with BA over Qantas's growth," said Mr Dixon. To publicly state this including the surprise over BA's sale does show that they could be parting ways, or are trying to show who's the boss around there...
 
Mulder
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RE: Qantas: Star Alliance

Tue Sep 14, 2004 1:53 pm

That is not likely to happen anytime soon. Though Qantas has a number of codeshare agreements with Star Alliance members or future members, like Asiana Airlines, South African Airways, also FFP partners SAS, US Airways and SAA, it has much more connection with oneworld partners. To quit oneworld would be very inconvenient for QF at the moment. But could happen say in five years, by the time maybe Air China would have joined.
 
Mulder
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RE: Qantas: Star Alliance

Tue Sep 14, 2004 2:08 pm

SQ leaving Star? Why bother to paint 3 aircrafts in Star livery recently?
 
Trolley Dolley
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RE: Qantas: Star Alliance

Tue Sep 14, 2004 2:21 pm

Just raising a different point of view. This is a frequently discussed topic, but the assumption out there always seems to be the QF will leave oneworld if it starts dealing with SQ. Who's to say the oneworld can't offer benefits to SQ that Star might not.

Alliance switching will always be governed by way more than a simple parting of ways of two very close airlines. I think ETstar is closer to the mark when he mentions posturing. To my knowledge there have been departures from alliances caused by financial troubles or the likes, but no voluntary switches.

Australia and Singapore have a very open aviation market, it's only natural that two savy, profitable airlines will find ways to benefit from this freedom.

 
chinaeastern
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RE: Qantas: Star Alliance

Tue Sep 14, 2004 3:47 pm

even if QF goes with SQ, it doesn't mean QF would join star. maybe form some sort of a new alliance. or put the other way around, SQ is more a la oneworld
 
mozart
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RE: Qantas: Star Alliance

Tue Sep 14, 2004 3:51 pm

Trolley DOlley,

To my knowledge there have been departures from alliances caused by financial troubles or the likes, but no voluntary switches.

Actually there has been the case of Mexicana leaving Star Alliance purely because it wanted to. The reason given was that MX was no longer code-sharing with UA - but then SQ stopped code-sharing with LH on FRA-JFK without leaving the alliance, so I don't know what to make of it.

But you are absolutely right in pointing out that switching alliances is not just a matter of leaving and erasing a logo from planes. There are financial hurdles, although I do not know what the penalty fees are for airlines leaving oneworld.
 
777ER
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RE: Qantas: Star Alliance

Tue Sep 14, 2004 5:15 pm

Indeed 777er, how much maintainence does NZ perform for QF?
NZ perform ALOT of maintaince for QF. When I was at the CHC maintaince base a few months ago there were three B733s there. Two were having the D check done and the other an A check. When I was walking pass the AKL maintaince base earlier this year I noticed two QF B744s there. NZ will be performing maintaince of the JQ (JetStar) A320 fleet. I think NZ perform all the D checks on the QF fleet off B737s, B767s and B744s

QF and NZ are wanting to combine their resources on flights in and out of New Zealand. Each airline will code-share on each others flights. NZ will control all of QF New Zealand domestic operations.
 
keesje
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RE: Qantas: Star Alliance

Tue Sep 14, 2004 5:45 pm

On Qantas working with SQ on A380 maintenance..

AF will work together with LH on the A380. It just makes sence for both.

Unlikely these airlines will join the same alliance because of it.

Maintenance is a seperate buisness.


On alliances , Skyteam also feels it wantsstronegr presence in Australia/NZ.

Could Qantas strike a deal with Star, Skyteam & Oneworld carriers ?

There is no rule forbidding it.

Look at e.g Alaska in the US, they are everybody's friend.

I do think the A380's too are changing some of the ball game here..

"Never mistake motion for action." Ernest Hemingway
 
ZKSUJ
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RE: Qantas: Star Alliance

Tue Sep 14, 2004 7:06 pm

QF will want to join Star (for the NZ deal) or stay in Oneworld.
In the current situation, who would skyteam make an alliance with? The next biggest airline in this region is probably Air Pacific.
 
anstar
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RE: Qantas: Star Alliance

Tue Sep 14, 2004 7:11 pm

I reckon QF will stick it out with Oneworld.
QF's main International markets are Asia, Europe & the US

Europe - They have a close partner in BA
US - They have a great relationship with AA
Both these Alliances work very well for QF.
Asia - They plan to start their LCC Jetstar Asia and have 'other' opportunities they are looking at.

By joining STAR the Asian LCC plans might be seen as treading on partners toes. So therefore I see Oneworld as the best fit for QF at the moment and can't see them moving to STAR.
 
Lufthansa
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RE: Qantas: Star Alliance

Tue Sep 14, 2004 7:22 pm

Guys, QF may want STAR, but does STAR want it?

I think the answer to that question is no. And as for SQ, well, I think CX would need to exit oneworld first before They'd even consider SQ. This may be on the Cards because CX doesn't exactly have a good relationship with BA or QF. I think CX was really just interested in AA's big frequent flyer base for to feed its north american flights.

I could definately see, however, the strength of a merger between QF and SQ. That would definately product some interesting results, of course, BA would need to be paid out.
 
qantasboy
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RE: Qantas: Star Alliance

Tue Sep 14, 2004 7:30 pm

Something I talked about just about 4 months ago... BA gets rid of QF and they go to Star with SQ. This IS going to happen, just watch. With QF and NZ wanting to forge a bigger relationship, and with SQ simulator sharing etc, QF draws ever nearer to the *Alliance. With the void left by Ansett, Star needs QF, and wants QF.

Watch this space.

QfBoy
Star Alliance... The Airline network for earth
 
777ER
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RE: Qantas: Star Alliance

Tue Sep 14, 2004 7:45 pm

If QF joins star then QF can still code-share with AA etc. Star has said that they need to fill the gap left by AN in Australia so Star NEEDS QF
 
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NZ1
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RE: Qantas: Star Alliance

Tue Sep 14, 2004 7:49 pm

777ER,

Your comments re the maintenance are not entirely true. We don't do ALL the 763,744 and 737 D checks at all. We have done about 15 763 C checks and Pylon Mods over the last 4 years or so, along with 4 or 5 733 C checks. A few of QF's 763's have gone to SASCO in the past as well. We have never done a 744 D check for QF. The 733's you mentioned in CHC were JetConnect aircraft, and are only done in CHC because it is cheaper than flying them to MEL.

Regards
NZ1
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UA744KSFO
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RE: Qantas: Star Alliance

Wed Sep 15, 2004 3:22 am

If QF joined Star, that would sure do away with any competition on US Mainland-Australia/NZ routes. It would also probably crush any chance for SQ to start service from SYD-LAX. It would, however, be good news for Emirates in their hopes to start LAX-AKL.

As ANstar correctly points out, QF's main International markets are Asia, Europe & the US.

North America - they would be able to take advantage of UA's LAX and SFO hubs. UA is more dominant at LAX than AA, and SFO can be offered as an alternative to LAX. Also, there might be an impetus to serve YVR again and even SFO.

Asia - Air China, SQ, TG, and NH.

Europe - Remember that most of QF's traffic to Europe goes through SIN and BKK already. However, QF has had to cancel several destinations to Europe in the past few years. Now, the option is to go to LHR and then double back if going to continental Europe. I think many people would rather the non-stops offered from SIN or BKK to destinations on the continent. Even if the destination wouldn't be served directly from SIN or BKK, stopping in FRA, MUC, or VIE would mean a few less hours spent in transit rather than going all the way to LHR. It would also mean that the kangaroo route would be used more for people actually going to Britain or Ireland (where BD would come in).

So, I think it would be to the advantage of both Star and QF if QF became a member of Star, even though they would now have to compete on the Kangaroo route.
 
antares
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RE: Qantas: Star Alliance

Wed Sep 15, 2004 5:35 am

If alliances actually delivered a fraction of the benefits touted back in 1997 and 1998 when Star and what has become tinyworld started out this post would be talking about really important business and operational issues.

But they didn't.

The QF perspective on alliances has under Dixon been that things like the SAA code share and the BA JSA are far more important. Let's face it. The former got rid of SAA from Sydney and the latter reduced BA to a grumpy participant flying far fewer of its own jets than before. Qantas even forced it to abandon its own Australian based Executive Club members like me. That stank.
 
gigneil
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RE: Qantas: Star Alliance

Wed Sep 15, 2004 7:30 am

If QF joins star then QF can still code-share with AA etc.

Why would they? United can provide more from SFO and LAX than AA can.

If QF joined Star, that would sure do away with any competition on US Mainland-Australia/NZ routes.

Yes, much like AA and BA on JFK-LHR, my guess is SYD-LAX would be well regulated by one of the two governments.

N
 
777ER
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RE: Qantas: Star Alliance

Wed Sep 15, 2004 7:58 am

If QF joins star then QF can still code-share with AA etc.

Why would they? United can provide more from SFO and LAX than AA can.


Yes I know that. What I was meaning was that QF could continue to code-share with AA out of the AA hubs, other then SFO and LAX
 
iowa744fan
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RE: Qantas: Star Alliance

Wed Sep 15, 2004 8:27 am

Two things to add on to people's comments about airlines from rival airlines doing maintenance on each others aircraft or other sort of agreements.

I remember that at one point, BA did a some maintenance for VS. The rumor was that each time a VS plane came back from maintenance with BA the "No Way BA/AA" slogan would be painted over. No way to confirm the latter part though.

Also, look at the cargo world. SQ, LH, and SAS operate together in the WOW group. This group also includes JAL. Well, I guess that JAL is not technically a member of Oneworld (Am I correct?), but they are more closely tied with OneWorld than anyone else.



 
SegmentKing
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RE: Qantas: Star Alliance

Wed Sep 15, 2004 8:35 am

which would allow QF and AA to codeshare out of what cities? HNL?

-n
~ ~ ~ ~ pRoFeSsIoNaL hUrRiCaNe DoDgEr ~ ~ ~ ~
 
Sydscott
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RE: Qantas: Star Alliance

Wed Sep 15, 2004 8:42 am


QF will not be joining Star period. Lets just think about this for a minute.

The posters above tout an alliance between QF and SQ as the major reason for this change in Alliances. I have one question for you. Since SQ is the 2nd largest International Carrier after QF in Australia do you really think such an arrangement would ever get ACCC approval??? The simple answer is hell NO!!!! Have a look at whats happening over the QF/NZ Alliance. Any proposal with SQ has more significance to long haul competition out of Australia than the QF/NZ deal has. It would be almost impossible to get it through

SQ's largest shareholder has also been touted as a reason for an alliance to go ahead. All of the financial commentators believe that the QF shareholding is seen as a pure investment play in SQ's largest competitor NOT as a precurser to anything more. Their involvement with QF's Asian LCC is also seen as hedging their bets against SQ being damaged in some way by the extra competition. Also there is an American company called the Capital Group which now owns almost 8% of QF judging by their Substantial Shareholder Notice. So its not as if SQ's parent is even close to having the sort of % that would be needed to force an alliance.

"QF will want to join Star (for the NZ deal)"

Absolute rubbish. QF will be the bigger partner in any deal with ANZ so if anything Air New Zealand will join Oneworld not the other way around.

If we want to examine QF's major markets then lets do so;

Asia - The most important partner here is JAL who sits outside all the Alliances. QF's arrangements with JAL on the major Japanese routes from Sydney & Brisbane are the key feature of its North Asian flying. Also JAL is as good as a member of Oneworld in all but name. It's codeshare with Asiana stems from Ansett International being awarded the flying rights to Korea way back when it was flying. I can't see ANA or Thai being of any Alliance Interest for QF esp since they downgraded Bangkok in favour of Singapore. If your talking Southeast or Central Asia then you talk of SQ, CX or MAS. (Excluding mainland China Airlines)

Europe - I suppose Oneworld was hoping that Swiss would offer the central Europe hub that they all wanted. However Oneworld does have the advantage at LHR in that ALL their major carriers fly large numbers of services there. It is the logical Eurpoean Alliance airport for them and QF has always had a large presence there. The only reason BA would have been annoyed at QF buying slots at LHR is because they are usually the ones who grab every single slot in site!!!! But any QF move to open services to LHR from China or India will be a Joint Servce with BA anyway so I wouldn't have thought BA would have anything against this happening. This is particularly the case with Virgin beating BA to the punch on developing long haul services esp in China. QF have dropped a number of services to Europe the same as the European carriers have dropped their services beyond Asia. What QF/Oneworld needs is an Alliance partner at one of the Gulf Airports aka Emirates or Gulf Air. This would alleviate the European connection even better than an Asian Alliance partner would.

North America - I dont think UAL & QF would be happy bed partners to say the least. Not to mention the lack of competition across the Pacific. The main connection QF needs at LAX are East Coast ones and thats why AA flights to New York, Washington, Chicago, Miami and Dallas form the backbone of thier strategy. Besides which if you want to fly on the West Coast QF connects with America West and Alaska so they dont need UAL.

So, in short, I dont think a QF move to Star makes any sense. Nor do I think the Star Alliance members would welcome it.
 
Mulder
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RE: Qantas: Star Alliance

Wed Sep 15, 2004 9:12 am

NZ would be unlikely to leave Star Alliance either. New Zealand Tourism Board had suggested that NZ leaving Star would be harmful to the tourism interests in New Zealand as many customers are actually Star Alliance partners customers and it is the only Star link in the pacific region.
 
QANTAS077
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RE: Qantas: Star Alliance

Wed Sep 15, 2004 9:19 am

Australia is the missing link in Star alliance's crown, i think Star members would welcome it!
 
wdleiser
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RE: Qantas: Star Alliance

Wed Sep 15, 2004 10:39 am

United has a good service to Australia that Qantas and UAL can cooperate with. If I were Qantas UAL would look like a much better airline and would be pretty confident it wouldnt be going down under.
United has plenty of flights to JFK and Newark from LAX too.
 
JoFMO
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RE: Qantas: Star Alliance

Wed Sep 15, 2004 11:10 am

For sure Star would welcome QF. There were strong rumor about SQ establishing their own domestic Australian affiliate after Ansett's demise. But due to market conditions this never became reality. And it was also often mentioned that SQ lost a significant number of frequent flyers in on of their biggest foreign market OZ.
Regarding the competition factor between SQ and QF I don't see it as an impossible hurdle. It would only be a problem if they would will to maintain their relationship with BA too. But that's quite clear that an agreement with SQ would mean an immediate termination of its agreement with BA. In fact competition between SIN and Australia is very and strong and a possible tie up between SQ and QF would not mean that any route which has competition today would loose it.
BA flies daily SIN-SYD and SYD-MEL and EK flies to both too and also SIN-BNE. I don't know if anybody except SQ and QF flies SIN-PER, but I am sure BA would try to fly themselves to PER if their QF pact would finish.
And regarding competition between UK and OZ a QF/BA break-up would be a positive thing. So far BA and QF are the only airlines from these two countries who fly the Kangaroo-route and therefore they are in a big advantage against their foreign competitors.
To NZ and USA a QF in Star might reduce competition significantly, but so far they remain independent carriers with only code-share relationships it was never a problem anywhere else as long as they accept slight restrictions.

The only real problem I could see for an alliance between SQ and QF are the 49% SQ holds in VS. But I have no doubt SQ would be more than willing to give them up when they could get a part of QF instead.
 
Sydscott
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RE: Qantas: Star Alliance

Wed Sep 15, 2004 12:07 pm


"In fact competition between SIN and Australia is very and strong and a possible tie up between SQ and QF would not mean that any route which has competition today would loose it."

It's only strong because you have two large International Carriers who both hub flights through Singapore. Ask yourself who is the largest carrier of passengers between Australia and Singapore??? QF and SQ. Allowing the two to co-operate on this route alone would create a virtual monopoly in all Australian cities. Singapore Airlines is considered Australia's 2nd International carrier. Where does the competition come from then??? EK is replacing its one stop flights with direct service to Dubai. That leaves BA going daily between Sydney and Melbourne and thats it. If we take Perth as an example SQ and QF fly around 4 flights per day to Singapore. In a jointly co-ordinated schedule these flights would connect to a bank of onward International flights in Singapore. There is no way BA could compete in such a market with 1 daily flight.

"And regarding competition between UK and OZ a QF/BA break-up would be a positive thing."

Not necessarily. The whole JSA argument is built around the fact that the Kangaroo Route doesn't just extend via Singapore. If you want to travel from Australia to London then you can pick from:

Singapore Airlines
Malaysian
Cathay Pacific
Thai Airways
Emirates
Gulf Air
Royal Brunei
Asiana
Korean
Garuda

just to name a few. It's SQ that is QF's largest competitor on the traditional Kangaroo route so a tie up between the 2 is more detrimental to competition than the present QF/BA arrangements.

To the USA you would not see QF give up a single service or seat to United. The route is simply too profitable for them. UAL might benefit because its Trans Pacific passengers will get better inflight service and entertainment options. But I cant see QF benefiting from it that much as UAL is already a pretty weak competitor.

"The only real problem I could see for an alliance between SQ and QF are the 49% SQ holds in VS."

Actually I can't see any problem with this. Virgin will only compete with QF on the SYD-HKG-LHR route and thats it. If you replace BA with Virgin at the other end of the Kangaroo route that would make for some pretty interesting partners to say the least.

But its not going to happen in any case!!!!  Smile/happy/getting dizzy
 
BOEING747-700
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RE: Qantas: Star Alliance

Wed Sep 15, 2004 12:53 pm

Would be nice, I can use my FF points from Air Canada with them Big grin