keesje
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SQ Rejects QF Merger To Get Pacific Route

Tue Oct 11, 2005 12:45 am


Singapore rejects Qantas merger to get Pacific route

SINGAPORE Airlines has ruled out a merger with Qantas as a means of securing access to the Pacific route to Australia.

SIA chief executive Chew Choon Seng said yesterday that the cabinet committee reviewing aviation policy must base its decision on Singapore's bid for access to the Pacific route on the merits of the arguments SIA and Qantas have put.

"The fundamental arguments on both sides are unchanged. It is very much a question of the committee having to weigh and balance the various options."


http://www.theaustralian.news.com.au.../0,5744,16877135%255E23349,00.html



A slip of the tongue of SQ? This will probably have some follow-up statements..
"Never mistake motion for action." Ernest Hemingway
 
zvezda
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RE: SQ Rejects QF Merger To Get Pacific Route

Tue Oct 11, 2005 5:52 am

The OZ government should do what is best for OZ (not for Qantas) and open up as much competition as possible. Unilateral Open Skies has done wonders for Dubai. It would do wonders for OZ too.
 
6thfreedom
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RE: SQ Rejects QF Merger To Get Pacific Route

Tue Oct 11, 2005 9:31 am

Of course SQ does not want to merge with QF.

Over the next six months, QF will apply to take a major stakeholding in NZ... perhaps 35%.

That will then open the door for SQ to operate on the trans-Pacific.
You will also see NZ move from Star to oneworld within 5 years...

watch this space...
 
PhilSquares
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RE: SQ Rejects QF Merger To Get Pacific Route

Tue Oct 11, 2005 9:35 am

Quoting 6thfreedom (Reply 2):
Of course SQ does not want to merge with QF.

Over the next six months, QF will apply to take a major stakeholding in NZ... perhaps 35%.

That will then open the door for SQ to operate on the trans-Pacific.
You will also see NZ move from Star to oneworld within 5 years...

Of course, you do realize SQ has sold it's stake in NZ?????
Fly fast, live slow
 
6thfreedom
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RE: SQ Rejects QF Merger To Get Pacific Route

Tue Oct 11, 2005 9:52 am

Quoting PhilSquares (Reply 3):
Of course, you do realize SQ has sold it's stake in NZ?????

Perhaps you should read my post again...

QF will take a 35% stakeholding in NZ, NOT SQ!

The NZ Govt no doubt wants back some of it's $885 million that it put into NZ went it almost collapsed.

I think the New Zealand and Australia regulators will give the merger the go-ahead this time around, and this will open the door for SQ to enter the trans-pacific...
 
PhilSquares
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RE: SQ Rejects QF Merger To Get Pacific Route

Tue Oct 11, 2005 10:44 am

Personally, I don't think the acquisition or equity stake in NZ will make any difference at all. I think there will be enough pressure brought to bear on the current administration that the decision will be made.

SQ has already committed to spend another US$15million/year for tourism in OZ and the quid pro quo was if they were allowed the OZ-US route they would spend a significant amount to promote OZ-US tourism.
Fly fast, live slow
 
AC787
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RE: SQ Rejects QF Merger To Get Pacific Route

Tue Oct 11, 2005 11:51 am

Quoting 6thfreedom (Reply 2):
You will also see NZ move from Star to oneworld within 5 years...

I would be very sad if NZ rlly did leave star and went to one world. Would rlly give oneworld the strangle hold on south pacific. I love SQ and all, but id rather fly to new zealand and austalia from SFO or LAX instead of going to singapore and then back tracking.
 
6thfreedom
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RE: SQ Rejects QF Merger To Get Pacific Route

Tue Oct 11, 2005 12:50 pm

Quoting AC787 (Reply 6):
I love SQ and all, but id rather fly to new zealand and austalia from SFO or LAX instead of going to singapore and then back tracking.

AC787...

The QF stakeholding in NZ would open the door for SQ to fully utilise the Singapore-Australia open skies agreement, in which case SQ would operate non-stop between the USA and Australia. There would not be a need to travel via SIN.

Probably SYD-LAX, then MEL-LAX, then BNE-LAX, then probably followed with services ex-SFO.

I think you would find that when QF takes a shareholding in NZ, NZ would continue to operate ex-AKL to north america, and would expand by taking over QF's AKL-USA sectors. QF would then operate solely ex-Australia to north america, competing with SQ and UA.
 
RichardJF
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RE: SQ Rejects QF Merger To Get Pacific Route

Tue Oct 11, 2005 1:23 pm

Quoting 6thfreedom (Reply 4):
Perhaps you should read my post again...

QF will take a 35% stakeholding in NZ, NOT SQ!

The NZ Govt no doubt wants back some of it's $885 million that it put into NZ went it almost collapsed.

I think the New Zealand and Australia regulators will give the merger the go-ahead this time around, and this will open the door for SQ to enter the trans-pacific...

This would be just insane for NZ.

While Dixon has been throwing around such ideas there's no way NZ needs QF any more.

When they tried for an alliance 3 years ago there was a very strong logic for NZ. They needed to neutralise QF when DJ was small (10 737's). ssssh...... don't tell anyone but this should be seen as a stalling tactic by NZ and little else.)

QF could have used it's position at that time to devastating effect against NZ and I'm not sure why they didn't.

Dixon looks around see's Air Canada and every other carrier that looks like QF and is sounding really desperate.
QF's current profitability is unsustainable and based around Ansett collapsing giving them the entire Australian business market.

DJ is now logically repositioning into these more lucrative markets.

These are the first three things QF needs to do

1. Get new management
2. Get new management
3. Get new management
 
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zeke
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RE: SQ Rejects QF Merger To Get Pacific Route

Tue Oct 11, 2005 1:27 pm

Quoting Keesje (Thread starter):
SINGAPORE Airlines has ruled out a merger with Qantas as a means of securing access to the Pacific route to Australia.

Seen comments like this in the press before, then two weeks later the airlines are merged.
We are addicted to our thoughts. We cannot change anything if we cannot change our thinking – Santosh Kalwar
 
PER744
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RE: SQ Rejects QF Merger To Get Pacific Route

Tue Oct 11, 2005 1:51 pm

Has everyone forgotten the legislation in place preventing foreign ownership of Qantas above a certain level? That would make a merger illegal. SQ can hardly reject something if they wouldn't be able to legally do it anyway.
 
6thfreedom
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RE: SQ Rejects QF Merger To Get Pacific Route

Tue Oct 11, 2005 2:25 pm

Quoting PER744 (Reply 10):
Has everyone forgotten the legislation in place preventing foreign ownership of Qantas above a certain level? That would make a merger illegal. SQ can hardly reject something if they wouldn't be able to legally do it anyway.

Agree PER744, although it should be noted that since Warren Truss became the new Transport Minister, there is an internal review at cabinet level in Canberra.

A policy announcement is expected in about 2 months, which I think will include:

- Permission for SQ top operate trans-tasman
- in principle agreement for QF to negotiate in a major stakeholding in NZ (although this is happening at the moment behind closed doors)
- QF's foreign ownership cap lifted to 49% perhaps?
 
nickofatlanta
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RE: SQ Rejects QF Merger To Get Pacific Route

Tue Oct 11, 2005 2:43 pm

Hey 6thFreedom -
Would that be permission for SQ to operate transpacific or transtasman? Can't imagine SQ would be all that keen to operate transtasman with all the competition.
 
6thfreedom
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RE: SQ Rejects QF Merger To Get Pacific Route

Tue Oct 11, 2005 3:17 pm

Quoting Nickofatlanta (Reply 12):
Would that be permission for SQ to operate transpacific or transtasman?

SQ has the rights to operate trans-tasman now if it wants to...
obviously there is little point in operating the sector since there is ample capacity and an array of LCC's, full service and a number of other international carriers (EK, LA, AR, BI, GA, TG).

So SQ is seeking permission to fly between Australia and the USA.... a decision on the trans-pacific is expected within a couple of months. SQ is tipped to operate B773ER's on the SYD-LAX sector to begin with..
 
PhilSquares
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RE: SQ Rejects QF Merger To Get Pacific Route

Tue Oct 11, 2005 4:54 pm

Quoting 6thfreedom (Reply 13):
SQ has the rights to operate trans-tasman now if it wants to...
obviously there is little point in operating the sector since there is ample capacity and an array of LCC's, full service and a number of other international carriers (EK, LA, AR, BI, GA, TG).

So SQ is seeking permission to fly between Australia and the USA.... a decision on the trans-pacific is expected within a couple of months. SQ is tipped to operate B773ER's on the SYD-LAX sector to begin with..

1) SQ currently operates 744F from SYD-AKL twice/week.

2) As far as the 773ER, it all depends on the timing. Right now, you'd see a 744 placed on the route. In fact, the plans are long term for the 744 to be replaced by the 380 or 747A
Fly fast, live slow
 
6thfreedom
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RE: SQ Rejects QF Merger To Get Pacific Route

Tue Oct 11, 2005 5:02 pm

Quoting PhilSquares (Reply 14):
2) As far as the 773ER, it all depends on the timing. Right now, you'd see a 744 placed on the route. In fact, the plans are long term for the 744 to be replaced by the 380 or 747A

Australia's SQ management is of the opinion that the sector would be on B773ER no earlier than June 2006, even if the rights were granted tomorrow.

Given fuel costs, it would also make sense to operate the B773ER from a cost perspective.

2007-08, once SQ starts operating the A380 SIN-SYD and establishes an A380 base in SYD, it would make sense to operate the A380 on SYD-LAX as well...
 
keesje
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RE: SQ Rejects QF Merger To Get Pacific Route

Tue Oct 11, 2005 6:44 pm

Who wants QF & SIA to merge?

Is there a push for a SQ/QF merger with the promise of Pacific access rights & ANZ (NZ government) doesn't want be kept out of the game?

QF is obviously not free do do what it thinks is best (Qantas Sale Act..) & the Singapore government is always behind the scenes..

SIA Lobbying Hard For Prized Australia-US Route
http://sg.biz.yahoo.com/051010/15/3vj31.html
"Never mistake motion for action." Ernest Hemingway
 
RichardJF
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RE: SQ Rejects QF Merger To Get Pacific Route

Tue Oct 11, 2005 7:38 pm

Quoting 6thfreedom (Reply 11):
- in principle agreement for QF to negotiate in a major stakeholding in NZ (although this is happening at the moment behind closed doors)

How on earth do you get to this assumption?
It would have to get over all soughts of hurdles
1. NZ surely wouldn't want it even though the Govt might.
2. Impossible because of NZ domestic.
3. Would nulify the whole direction NZ's taking which is competing with QF.

Although I guess with NZ Finance Minister Micheal Cullen practical anythings possible.
 
iowa744fan
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RE: SQ Rejects QF Merger To Get Pacific Route

Wed Oct 12, 2005 12:08 am

Not to get off the subject a little, but can someone remind me is BA sold their stake in QF or do they still control 25%? sorry, but I don't remember and I was just curious if any potential merger or equity stake would involve this 25%. Thanks.
 
PhilSquares
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RE: SQ Rejects QF Merger To Get Pacific Route

Wed Oct 12, 2005 12:42 am

Quoting 6thfreedom (Reply 15):
Australia's SQ management is of the opinion that the sector would be on B773ER no earlier than June 2006, even if the rights were granted tomorrow.

Given fuel costs, it would also make sense to operate the B773ER from a cost perspective.

2007-08, once SQ starts operating the A380 SIN-SYD and establishes an A380 base in SYD, it would make sense to operate the A380 on SYD-LAX as well...

One of the problems with the 773ER is the F/C cabin. SQ wants to make sure the premium cabins are competitive with QF. Right now the 773ER wouldn't be.

With respect to the 380. A SYD base? That's a new one. In addition, there is a range problem with the 380 on the LAX-SYD route. Right now that is at the no wind limit of the 380's range. Add headwinds in and you're looking at payload restrictions. The SQ 744 can do it with a full load.
Fly fast, live slow
 
airtropolis
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RE: SQ Rejects QF Merger To Get Pacific Route

Wed Oct 12, 2005 3:25 am

Quoting Philsquares (reply 19):
"One of the problems with the 773ER is the F/C cabin. SQ wants to make sure the premium cabins are competitive with QF. Right now the 773ER wouldn't be."

I thought that the 773ERs will have the same cabins as the A380s and would thus be competitive or even surpass the QF product across the Pacific. As for the A380 making the range requirements of SYD/MEL - LAX vv, isn't it Qantas' intention that the A380 would inaugurate with a MEL-LAX flight and therefore should have the ability to fly that route unless Airbus has failed to meet the promised range and performance targets for the aircraft?

In any case, I do not think that SQ will have enough A380s based on its current order to operate all the SIN-LHR/SYD flights it wants as well as an OZ-LAX service unless they operate less flights with the aircraft to LHR or SYD.
 
6thfreedom
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RE: SQ Rejects QF Merger To Get Pacific Route

Wed Oct 12, 2005 8:39 am

Quoting PhilSquares (Reply 19):
In addition, there is a range problem with the 380 on the LAX-SYD route. Right now that is at the no wind limit of the 380's range. Add headwinds in and you're looking at payload restrictions.

That's interesting... because QF has already announced MEL-LAX as one of its first A380 sectors, making it one of the longest in the world...

SYD-LAX is about 380nm less than MEL-LAX, so how would QF be able to do it, but not SQ.

PS. Just confirming that I am not being sarcastic. With your flying experience and knowledge you may know...
 
PhilSquares
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RE: SQ Rejects QF Merger To Get Pacific Route

Wed Oct 12, 2005 2:08 pm

The 380 will have a no wind range of around 6700NM. If you look at the great circle distance, you will see the range is approaching that number. Add in winds and now you have a problem. To resolve it, you takeoff payload.

Time will tell.
Fly fast, live slow
 
RichardJF
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RE: SQ Rejects QF Merger To Get Pacific Route

Wed Oct 12, 2005 2:32 pm

6thfreedom - sorry my first posts were silly.

Quoting 6thfreedom (Reply 11):
- in principle agreement for QF to negotiate in a major stakeholding in NZ (although this is happening at the moment behind closed doors)

Do you think the New Zealand Government has been trying to get the election out of the way before making this known or is your QF buy in just guesswork?
 
6thfreedom
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RE: SQ Rejects QF Merger To Get Pacific Route

Wed Oct 12, 2005 9:52 pm

As far as i know, there has been a lot happening between QF and the NZ Govt over the last couple of months.

The election has most definitely slowed things down a little bit.

AFAIK, the fact that the Govt has been returned to office but without a majority is a bit of an issue in terms of getting the deal over the line....

I would imagine QF is lobbying in NZ at the moment, to try and get the deal over the line...

Some people have commented that Air NZ would not support the deal.

That might be the case, but it is worth remembering that it is the NZ Govt, not Air NZ, that has $885 million tied up with a national carrier which should ideally be operating as a private entity...

One would also expect that the return to NZ taxpayers would be quite healthy given NZ's excellent turnaround since 2001-02.
 
aerokiwi
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RE: SQ Rejects QF Merger To Get Pacific Route

Thu Oct 13, 2005 7:43 am

I'm willing to bet my meagre savings that you will NOT see a QF stake in NZ during this government's life. Here's why...

New Zealand First (political party) has a bedrock policy of not selling state assets. It's one of their big mantras. they've even advocated buying back state assets before. And now they are the key to Labour forming the next government.

NZFirst has pulled out of government before, in 1998, following the sale of Wellington Airport. They will do it again over Air NZ, which is a far more prominant asset. The collapse of a government that is al;ready on shakey ground is the absolute last thing Labour or Helen Clark will want.

And with no immediate need to sell off the airline, which is now beginning to return dividends to State coffers as well as increasing the government's shareholding value threefold, this is a political hot potato that just will not pass.

And why does everyone keep forgetting about the Commerce Commission rulings that a QF/NZ tie-up was anti-competitive and thus couldn't be allowed? This can't simply be dismissed.

NZ was either foolishly following a misguided strategy in its quest to tie-up with Qantas, or was spectacularly successful in delaying the onslaught of QF long enough so it could get its own house in order and ready for battle. I'm starting to think the latter.
 
RichardJF
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RE: SQ Rejects QF Merger To Get Pacific Route

Thu Oct 13, 2005 9:01 am

Quoting 6thfreedom (Reply 24):
As far as i know, there has been a lot happening between QF and the NZ Govt over the last couple of months.

The election has most definitely slowed things down a little bit.

AFAIK, the fact that the Govt has been returned to office but without a majority is a bit of an issue in terms of getting the deal over the line....

I would imagine QF is lobbying in NZ at the moment, to try and get the deal over the line...

Well hang on a minute........United Future New Zealand one of the minor parties new absolutely nothing about this.

We're Qantas executives talking to the New Zealand finance minister about buying a shareholding in Air New Zealand.
If the New Zealand Finance Minister was involved in any discussions or lobbying whatsoever during or prior to an election campaign that information should have been provided to United Future New Zealand.
 
aerohottie
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RE: SQ Rejects QF Merger To Get Pacific Route

Thu Oct 13, 2005 10:52 am

What on earth does United Future have to do with anything??? Minor party not likely to have any power in the next government thus far.
What?
 
aerokiwi
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RE: SQ Rejects QF Merger To Get Pacific Route

Thu Oct 13, 2005 1:12 pm

If negotiations between the Govt. and QF were going on before the election and were at quite an advanced stage, then Clark and Labour are going to have an enormous task to pass the sale through Parliament, let alone the public.

There is simply no electoral mandate for the sale of what is a major, high profile asset, as none of these negotiations were disclosed to shareholders, ie. the public and the minor, private holders. And with none of the minor parties likely to support any sale and National likely to vote against just to embarrass Labour, the idea is already dead. Labour wouldn't dare - it'd be a political nightmare.

This whole situation is far more complicated than 6thfreedom suggests.

And again - the Commerce Commission equals a massive hurdle.

I do see a potential reinvestment by SQ once Labour is out of office (it was Michael Cullen's deliberate moves that led to the thwarting of an SQ buyout of NZ, leading to the collapse of Ansett and virtual collapse of Air NZ, don't forget). Or EK (or someone similar who has a lot of cash, bar Qantas) further down the road. but the political climate is simply not right at he moment.
 
6thfreedom
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RE: SQ Rejects QF Merger To Get Pacific Route

Thu Oct 13, 2005 2:36 pm

Quoting Aerokiwi (Reply 28):
This whole situation is far more complicated than 6thfreedom suggests.

I will be interested in re-visiting this thread in about 3 months time...
I'll put a reminder in my diary to do so!
 
aerokiwi
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RE: SQ Rejects QF Merger To Get Pacific Route

Thu Oct 13, 2005 3:52 pm

Oh don't get me wrong, I'm not doubting that some form of communication is going on between the airlines.

What I'm saying is that once it's brought public, you can expect a massive kerfuffle at the political level. You clearly don't understand New Zealand's current political dynamic if you think this is signed and sealed. NZFirst will be porpping this government up for the next 3 years. and they are most certainly opposed to asset sales following the botched sales of the 80s and 90s, including Air NZ to, uh oh, Qantas.

If a sale is proposed within the next 3 months and is taken public, how would it look for a government to collapse following the withdrawl of its confidence and supply vote (NZFirst) such a short time out from a hugely divisive election?

Oh and once again, there is the huge issue of the Commerce Commission's ruling on anti-competitiveness on domestic routes, US routes and a whole heap of Tasman flights.

So 6thfreedom, can you actually address these issues rather than just pencil things into your diary?
 
6thfreedom
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RE: SQ Rejects QF Merger To Get Pacific Route

Thu Oct 13, 2005 4:22 pm

Quoting Aerokiwi (Reply 30):
So 6thfreedom, can you actually address these issues rather than just pencil things into your diary?

I am not saying that the shareholding will be completed within 3 months...

But i think you will find that although NZ has produced some reasoanle results in the last 2 years, QF, which is a lot bigger and healthier will start to wind up the screws, adding pressure on NZ. And with fuel prices where they are, life isn't going to get any easier for NZ.

NZ commenced SFO... QF announced shortly afterwards
NZ operating MEL-AKL-LAX B744... QF announced daily MEL_AKL_LAX today!
Jetstar services to CHC!

QF is big enough to beat NZ into submission.... and I think they will do that if they have to..
 
RichardJF
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RE: SQ Rejects QF Merger To Get Pacific Route

Sat Oct 15, 2005 5:26 pm

Quoting Aerohottie (Reply 27):
What on earth does United Future have to do with anything??? Minor party not likely to have any power in the next government thus far.

If there was any remotely serious talk it would have to be available to the electorate.
I personally think Cullen would treat such an approach by QF not too seriously because as Aerokiwi said it politically just couldn't happen. I find surprising however that QF could be wasting time on such an approach in the first place.

Quoting 6thfreedom (Reply 31):
QF is big enough to beat NZ into submission.... and I think they will do that if they have to..

3 years ago when QF had such a dominant situation in Australian domestic this would be a valid point.
Now DJ has 50 737's and moving toward a FF program & LiveTV as well as a share price to support and with OZjet starting up.

I just don't think you get it pal.
 
RichardJF
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RE: SQ Rejects QF Merger To Get Pacific Route

Sat Oct 15, 2005 5:41 pm

Furthermore QF management should focus on running their business rather than flying around the world delivering long rambling speeches about Government ownership of Airlines.
Move on from pointless attempts at seeking shareholdings in other airlines as a way to stop competition and silly unrealistic transborder mergers that just ain't going to happen.
They should take a pragmatic approach and think that airlines like SQ, EK and NZ while competitive are not wanting to wipe out QF.