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jetblueguy22
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Report: Qantas Drops Plan To Create Asian Carrier

Sun Nov 27, 2011 11:33 pm

http://www.reuters.com/article/2011/.../qantas-asia-idUSL4E7MR0BS20111127
Looks like the plan just isn't going to work out in this economic environment. Can't say I'm overly surprised.
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xiaotung
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RE: Report: Qantas Drops Plan To Create Asian Carrier

Sun Nov 27, 2011 11:41 pm

I wonder what was the real reason why the plan was shelved. Did they upset MH? There was a report a while ago that MH was evaluating whether or not joing oneworld was such a good idea. Also they might have found that establishing an airline in Singapore wasn't an option either as SQ had objected to the government. Why would the Singapore government not protect SQ? Perhaps QF should have done a reality check before announcing this plan which had done nothing helpful to the union situation. So now QF has fought the unions and damaged all their own reputation all for nothing.
 
smi0006
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RE: Report: Qantas Drops Plan To Create Asian Carrier

Sun Nov 27, 2011 11:44 pm

I certainly think a closer deal with MH makes far more sense then creating a whole new airline... There were rumors a few years ago of an MH QF merger, only 'issue' if you want to call it, is KUL and SIN being two hubs for both airlines being so close but not necessarily things that can't be over come.

There are also rumors that we could be seeing MH A380 in MEL and SYD as early as April next year, would make sense I suppose if a JV was established with MH.

Wonder how Tony F plays into this.

However what is going to happen with all those A320s they just ordered all to JQ, 3K and jetstar pacific and Japan?
 
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Zkpilot
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RE: Report: Qantas Drops Plan To Create Asian Carrier

Mon Nov 28, 2011 12:34 am

Quoting smi0006 (Reply 2):
However what is going to happen with all those A320s they just ordered all to JQ, 3K and jetstar pacific and Japan?

Expand 3K quicker, replace older A320 earlier perhaps.
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koruman
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RE: Report: Qantas Drops Plan To Create Asian Carrier

Mon Nov 28, 2011 12:34 am

Quoting xiaotung (Reply 1):
I wonder what was the real reason why the plan was shelved
Quoting smi0006 (Reply 2):
However what is going to happen with all those A320s they just ordered all to JQ, 3K and jetstar pacific and Japan?

I just don't buy the idea that Joyce and the board are that inept and that stupid.

From the get-go, many of us have been pointing out the fundamental intellectual vacuity of the half-baked Red Roo concept, and that its chances of success were a nice round zero. Even if it somehow worked, the host government would want it for itself.

So what game have we been watching? Was this all about obtaining camouflage for diverting Qantas largesse into a vast expansion of Jetstar's fleet and operations.

When people in powerful positions act stupid there is one question to ask. Are they really that stupid, or was it just an act to get what they wanted?

But in the case of Qantas' management that is a very hard question to answer, because so much of their behaviour is suggestive of genuine stupidity at the highest levels of the operation.

Not the stupidity of people with a low IQ. The stupidity of people who cannot judge the (political and market) environment in which they operate, who are emboldened by their occupation of powerful positions and who are surrounded by like-minded people. In some respects Qantas under Joyce and Clifford is starting to resemble the Jonestown massacre in Guyana, with Leigh Clifford in the role of an overpowering Jim Jones, pushing a vulnerable (weak, isolated and socially awkward) Alan Joyce further and further over the edge. And I would hypothesise that, like Jim Jones, in private Clifford is getting angrier and angrier towards his "enemies", and dreaming up more and more "decisive" ways to finish them off. But in the real world - where his customers (as opposed to his stockholders) live - those enemies are actually his own workforce, and that decisiveness just looks like bullying.

[Edited 2011-11-27 16:52:54]
 
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mariner
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RE: Report: Qantas Drops Plan To Create Asian Carrier

Mon Nov 28, 2011 1:43 am

I'm rather hoping it means Qantas will get into bed with Tony Fernandes and his premium airline:

http://www.centreforaviation.com/blo...qantas-asian-premium-carrier-62408

The reports are that Mr. Joyce and Mr. Fernandes have have several meetings in the last few days.

But, whatever it turns out to be, I assume the Qantas bashers will be out in force. Ben Sandilands has already started - and he doesn't even know what is happening yet.

The usual rush-to-judgement.

mariner
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81819
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RE: Report: Qantas Drops Plan To Create Asian Carrier

Mon Nov 28, 2011 1:52 am

Quoting mariner (Reply 5):

Looks like another long thread coming up.

It might be the case leveraging a MH deal could be of greater benefit to the QF group. As always it will come down to the success of talks between multiple parties.

It I'll be interesting to see how this one pans out!
 
koruman
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RE: Report: Qantas Drops Plan To Create Asian Carrier

Mon Nov 28, 2011 2:05 am

A full Qantas alliance with Malaysia Airlines would certainly put the cat among the pigeons.

In the first instance, the ACCC would almost certainly require the British Airways-Qantas duopoly to be broken up.

If we assume that Qantas would then feed into Malaysian services from KUL across Europe, Asia and Africa you then encounter the second obstacle.

Qantas considers itself to be a top-end of the market brand, able to command a fare premium for the quality of its product. Malaysia has no such pretensions or aspirations and in general undercuts airlines like Singapore Airlines by around 20-30% in terms of fare levels. Their current Business Class published fares from Australia to Africa start at $5200 cf Qantas $6200 and to London are $5699 cf Qantas $7689.

In other words, if Qantas does decide to forsake its BA duopoly for an alliance with Malaysian it has to understand that its yields will drop by 15-20% overnight. And that is only worthwhile if it tries to aggressively grow its volumes.
 
jacobin777
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RE: Report: Qantas Drops Plan To Create Asian Carrier

Mon Nov 28, 2011 2:08 am

Quoting koruman (Reply 7):
In the first instance, the ACCC would almost certainly require the British Airways-Qantas duopoly to be broken up.

Why?   
"Up the Irons!"
 
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mariner
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RE: Report: Qantas Drops Plan To Create Asian Carrier

Mon Nov 28, 2011 2:08 am

Quoting koruman (Reply 7):
In other words, if Qantas does decide to forsake its BA duopoly for an alliance with Malaysian it has to understand that its yields will drop by 15-20% overnight. And that is only worthwhile if it tries to aggressively grow its volumes.

I didn't know they are planning to do that. I don't know what they are planning to do.

I do find it all rather exciting, and I am not quite sure why you are so determined to put the mockers on it - whatever it may be.

mariner
aeternum nauta
 
koruman
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RE: Report: Qantas Drops Plan To Create Asian Carrier

Mon Nov 28, 2011 2:34 am

Quoting mariner (Reply 9):
I didn't know they are planning to do that. I don't know what they are planning to do.

I do find it all rather exciting, and I am not quite sure why you are so determined to put the mockers on it - whatever it may be.

I am stating that the original publically spun proposal was stupid, and that the Malaysian alternative is also foolish.

But I think that there is a small chance - very small - that Joyce is actually executing a brilliantly conceived and brilliantly-concealed alternative. An alternative which really would let Qantas seize the high-point in terms of yields while growing its network beyond Asia in a way it cannot otherwise do.

That isn't a divorce from BA to tie-up with Malaysia Airlines. It's a divorce from BA to tie-up with Singapore Airlines.

Singapore Airlines is a lousy member of the Star Alliance from the point of view of non-SQ frequent flyers. Recognition is minimal - the Star Gold lounge at Changi is actually inferior to being in the general terminal. You have to pay supplements to fly SQ on Star Round The World and Circle Pacific fares.

But they are a quality airline and a high-yielding airline

If Joyce's hidden plan is QF-SQ, then it's a masterstroke. But the fact that SQ has just got into bed with John Borghetti's Virgin Australia makes it a very unlikely masterstroke.
 
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mariner
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RE: Report: Qantas Drops Plan To Create Asian Carrier

Mon Nov 28, 2011 2:42 am

Quoting koruman (Reply 10):
I am stating that the original publically spun proposal was stupid, and that the Malaysian alternative is also foolish.

I know you are. There seems to be no pleasing you.

I think IF they are abandoning the barely sketched out original plan, it cuts the ground from most of the union objections.

Oh, happy day!  
Quoting koruman (Reply 10):
That isn't a divorce from BA to tie-up with Malaysia Airlines. It's a divorce from BA to tie-up with Singapore Airlines.

(i) I haven't heard there is to be any divorce from anyone.

(ii) the chances of there being a tie-up with Singapore seem remarkably slender.

mariner
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koruman
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RE: Report: Qantas Drops Plan To Create Asian Carrier

Mon Nov 28, 2011 2:55 am

Quoting koruman (Reply 7):
In the first instance, the ACCC would almost certainly require the British Airways-Qantas duopoly to be broken up.
Quoting Jacobin777 (Reply 8):
Why?

Because it is the ACCC's job to ensure that the market is as competitive as possible, and that there are restrictions on anti-competitive arrangements such as the BA-QF Kangaroo Route tie-up and the SA-QF Indian Ocean one - which we already know will be forbidden beyond December 2012.

Quoting mariner (Reply 11):
I haven't heard there is to be any divorce from anyone

I know that. But in terms of beyond-Asia carriage, Qantas will only be allowed to get into bed with Malaysia if it separates from BA first.

And even in terms of within-Asia carriage, Virgin Australia could easily argue that Qantas could use Asian feed from an anti-competitive tie-up to subsidise its long-haul routes from Australia to Asia.
 
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mariner
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RE: Report: Qantas Drops Plan To Create Asian Carrier

Mon Nov 28, 2011 3:01 am

Quoting koruman (Reply 12):
I know that. But in terms of beyond-Asia carriage, Qantas will only be allowed to get into bed with Malaysia if it separates from BA first.

Well, maybe. Since I don't know what is going to happen, I can't say.

I do think that Mr. Joyce and the folk running Qantas may be a bit smarter than some of their many critics - most of whom got it wrong over the grounding, for example.

mariner
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cam747
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RE: Report: Qantas Drops Plan To Create Asian Carrier

Mon Nov 28, 2011 3:12 am

Quoting xiaotung (Reply 1):
So now QF has fought the unions and damaged all their own reputation all for nothing.

Or you could say the Unions have fought QF and damaged the company's reputation all for nothing. Guess it depends which side of the fence you sit.   
 
Sydscott
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RE: Report: Qantas Drops Plan To Create Asian Carrier

Mon Nov 28, 2011 3:52 am

Quoting koruman (Reply 12):
Because it is the ACCC's job to ensure that the market is as competitive as possible, and that there are restrictions on anti-competitive arrangements such as the BA-QF Kangaroo Route tie-up and the SA-QF Indian Ocean one - which we already know will be forbidden beyond December 2012.

You're making the wrong comparison. There is no way the ACCC won't authorise and continue to re-authorise QF/BA in the same way they would authorise QF/BA/MH. The reason they will re-authoirse it is because the immunised alliance will have competition from Singapore, Thai, Cathay Paciific, Emirates, Etihad, Qatar, China Southern, ANA, Korean and every other carrier between Australia and Europe. Unlike South Africa the European market is ultra competitive, it's not a duopoloy and consumers have plenty of choice. That's what the IASC and the ACCC will look at.

A further point, the SAA/QF tie up to South Africa is only IASC authorised, it's not ACCC authorised. The ACCC would never authorise anything given the previous and current state of the South Africe route. Indeed the IASC authorisation is dependent on absolutely no information sharing, revenue share or anything on the South African route and the ACCC would be monitoring this vigorously to ensure it happened.

Quoting koruman (Reply 12):
I know that. But in terms of beyond-Asia carriage, Qantas will only be allowed to get into bed with Malaysia if it separates from BA first.

No it wouldn't. It would be the same if Virgin, Etihad and Virgin Atlantic decided to do a deal. That would obtain approval in the same way as a QF/BA/MH deal would get approval. Considering QF doesn't even fly to Malaysia it techncially should be even easierfor the QF/MH part to get up because there will be no reduction in compeition or capacity into Australa. And, as luck would have it, BA doesn't fly into Malaysia either. So from the British end there more than likely won't be that many problems with a BA/MH deal either. So I think if they were to get into bed it'd be one of the easier cases for regulators to follow and approve because there isn't any direct competition between the 3 airlines anyway.

Quoting mariner (Reply 11):
I think IF they are abandoning the barely sketched out original plan, it cuts the ground from most of the union objections.

I think you're entirely correct if that is what is happening.

Quoting koruman (Reply 10):
That isn't a divorce from BA to tie-up with Malaysia Airlines. It's a divorce from BA to tie-up with Singapore Airlines.

There won't, and doesn't need to be a divorce.
 
cam747
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RE: Report: Qantas Drops Plan To Create Asian Carrier

Mon Nov 28, 2011 4:16 am

ABC is reporting that Alan Joyce has rejected reports that he is dumping redQ in favour of a deeper MH alliance.

http://www.abc.net.au/news/2011-11-2...a-carrier-twt/3699336?WT.svl=news2
 
dkramer7
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RE: Report: Qantas Drops Plan To Create Asian Carrier

Mon Nov 28, 2011 5:08 am

Quoting xiaotung (Reply 1):

I wonder what was the real reason why the plan was shelved

First of all, RedQ (Or whatever you want to call it) has not been shelved. the original article cited no references, and as such should be taken with a grain of salt. Lets wait until Qantas announce anything before we make it certain
 
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EK413
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RE: Report: Qantas Drops Plan To Create Asian Carrier

Mon Nov 28, 2011 6:14 am

Quoting koruman (Reply 12):
SA-QF Indian Ocean one - which we already know will be forbidden beyond December 2012.

Could you please elaborate as to why the SA/QF arrangement will cease beyond 2012?
Will this mean the return of SA to the east coast of Australia...?

EK413
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Lufthansa
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RE: Report: Qantas Drops Plan To Create Asian Carrier

Mon Nov 28, 2011 7:33 am

I wouldn't believe it. This is just major gossip. It's unsubstantiated. This would be a major change in recent direction and they would need to release the information to the stock exchange, and of course no such thing has happened. Wishful thinking, or somebody hoping to manipulate the share price. Without a source it's nothing more than gallay gossip and we know how reliable that is.
 
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EK413
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RE: Report: Qantas Drops Plan To Create Asian Carrier

Mon Nov 28, 2011 7:54 am

Quoting Lufthansa (Reply 19):
I wouldn't believe it. This is just major gossip. It's unsubstantiated. This would be a major change in recent direction and they would need to release the information to the stock exchange, and of course no such thing has happened. Wishful thinking, or somebody hoping to manipulate the share price. Without a source it's nothing more than gallay gossip and we know how reliable that is.

Are you referring to the thread or SA-QF code share agreement?

EK413
Good evening, ladies and gentlemen. We are tonight’s entertainment!
 
kiwiandrew

RE: Report: Qantas Drops Plan To Create Asian Carrier

Mon Nov 28, 2011 8:09 am

Quoting EK413 (Reply 20):
Are you referring to the thread or SA-QF code share agreement?

he's referring to the thread. The IASC's decision to terminate approval for the arrangement at the end of 2012 was reported last week. http://www.travelweekly.com.au/news/qantas-saa-codeshare-flops
 
Independence76
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RE: Report: Qantas Drops Plan To Create Asian Carrier

Mon Nov 28, 2011 8:26 am

I think this is a smart move.

The only focus within Qantas at the moment should be at the base airline and its performance.
 
TruemanQLD
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RE: Report: Qantas Drops Plan To Create Asian Carrier

Mon Nov 28, 2011 8:51 am

I am going to ignore most of what was said in previous posts by AJ-haters as it has well and truly been said in about 5 different threads for the past 3 months. But on the actual point, Alan Joyce has denied the reports and I dont understand, even if a closer MH tie up occurred, why they couldnt both happen?

There is no way QF will move from SIN to KUL, SIN has proved a very good, worthwhile hub for Qantas (and Jetstar) for many years, and will for RedQ or whatever it ends up being called.

I would also like to point out that Alan Joyce isnt single-handedly organising QFAsia. Not only will the board have a big say, but a wide team of analysts, and anyone who says otherwise should take a lesson in how big business works. As much as some like to think otherwise, AJ isnt an idiot, he knows his stuff and he wouldnt allow an investment of millions into an airline thats going to fail (or, and I quote 'its chances of success were a nice round zero'). Sure, they might decide that it isnt going to work and pull out as the report says, but I think after getting this far in the process, it will almost definitely go ahead.

Also, I think we should all wait until we see the final details about the airline before we all rush to assumptions about its success. I mean really, we dont know all that much about it, what routes it will fly, what the aircraft layout will be, what the aircraft will be like, what its name will be, how it will integrate with QF/JQ and other OW members and what its target market is.

Too many arm chair CEO's!

 
 
Flyingsottsman
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RE: Report: Qantas Drops Plan To Create Asian Carrier

Mon Nov 28, 2011 9:40 am

it makes me wounder why they got rid of Australian Airlines, why spend more money setting up an airline is Asia when they forever cry poor. Do you think if Australian was kept that could have played a big role in Asia?
 
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allrite
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RE: Report: Qantas Drops Plan To Create Asian Carrier

Mon Nov 28, 2011 11:15 am

Quoting Flyingsottsman (Reply 25):
it makes me wounder why they got rid of Australian Airlines, why spend more money setting up an airline is Asia when they forever cry poor.

I'm assuming that you mean the final version of Australian Airlines rather than the TAA domestic version. They really just replaced that with Jetstar, which was even cheaper to run.

After four legs (admittedly all on the same aircraft!) in long-haul economy with MH it felt like a real downgrade from QF and that's a straight comparison between their two 747 services. Maybe things are different in the pointy end, but I got the feeling that MAS management might be living in la-la land if their marketing is anything to go by. Hopefully Fernandez is a bit better grounded because I would be nervous about doing deals with them.
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lhr380
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RE: Report: Qantas Drops Plan To Create Asian Carrier

Mon Nov 28, 2011 12:07 pm

Quoting koruman (Reply 7):
In the first instance, the ACCC would almost certainly require the British Airways-Qantas duopoly to be broken up.

Considering how close BA/QF work on the Kangaroo route, and how closer they are getting soon with each carrier dropping some services to feed into the others from the Mid Points, I don't see at all the partnership breaking up unless one of the carriers goes under.
(The views on this site are my own and no one elses)
 
mogandoCI
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RE: Report: Qantas Drops Plan To Create Asian Carrier

Mon Nov 28, 2011 1:01 pm

East Asia is already filled with top tier brands that EACH command higher respect and service quality than QF - i can easily name CX, SQ, TG, KE, OZ, NH, JL.....

Qantas would have a totally hard time penetrating that market.... especially if they want to go the premium route
 
TN486
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RE: Report: Qantas Drops Plan To Create Asian Carrier

Mon Nov 28, 2011 1:32 pm

Quoting TruemanQLD (Reply 23):
I am going to ignore most of what was said in previous posts by AJ-haters as it has well and truly been said in about 5 different threads for the past 3 months. But on the actual point, Alan Joyce has denied the reports and I dont understand, even if a closer MH tie up occurred, why they couldnt both happen?

Sir, I totally agree with you in all of your post reply 23 (only partially quoted above). The tall poppy syndrome is very much alive and well IMHO.
QF have gone too far down the road to withdraw from their stated intentions.
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leonardoq
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RE: Report: Qantas Drops Plan To Create Asian Carrier

Mon Nov 28, 2011 3:54 pm

i can be dead wrong right now,but in my opinion, this are good news... jobs get to stay where they belong.
JJ, G3, QF, DJ, TG, LA, AR, EY, EK, LH, JQ, VY, TP, TZ, TR, AA
 
jacobin777
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RE: Report: Qantas Drops Plan To Create Asian Carrier

Mon Nov 28, 2011 6:56 pm

Quoting koruman (Reply 12):
Quoting koruman (Reply 7):
In the first instance, the ACCC would almost certainly require the British Airways-Qantas duopoly to be broken up.
Quoting Jacobin777 (Reply 8):
Why?

Because it is the ACCC's job to ensure that the market is as competitive as possible, and that there are restrictions on anti-competitive arrangements such as the BA-QF Kangaroo Route tie-up and the SA-QF Indian Ocean one - which we already know will be forbidden beyond December 2012.

I agree with sydscott. I don't see a problem in terms of competition. In fact, its because of competition QF has to do something.

Quoting sydscott (Reply 15):
Quoting koruman (Reply 12):
Because it is the ACCC's job to ensure that the market is as competitive as possible, and that there are restrictions on anti-competitive arrangements such as the BA-QF Kangaroo Route tie-up and the SA-QF Indian Ocean one - which we already know will be forbidden beyond December 2012.

You're making the wrong comparison. There is no way the ACCC won't authorise and continue to re-authorise QF/BA in the same way they would authorise QF/BA/MH. The reason they will re-authoirse it is because the immunised alliance will have competition from Singapore, Thai, Cathay Paciific, Emirates, Etihad, Qatar, China Southern, ANA, Korean and every other carrier between Australia and Europe. Unlike South Africa the European market is ultra competitive, it's not a duopoloy and consumers have plenty of choice. That's what the IASC and the ACCC will look at.
"Up the Irons!"
 
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huaiwei
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RE: Report: Qantas Drops Plan To Create Asian Carrier

Mon Nov 28, 2011 7:40 pm

Quoting xiaotung (Reply 1):
Also they might have found that establishing an airline in Singapore wasn't an option either as SQ had objected to the government. Why would the Singapore government not protect SQ?

Can you substantiate this comment, particularly pertaining to SQ's objection? As for the Singapore government's alleged protection of SQ, I think it has been well debated and established long ago that SQ receives very little protection of any sort, and the government's official stance on developing the aviation industry in Singapore is clear: Open skies rather than protectionism. Unless of course you can provide new evidence to show otherwise.
It's huaiwei...not huawei. I have nothing to do with the PRC! :)
 
bastew
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RE: Report: Qantas Drops Plan To Create Asian Carrier

Mon Nov 28, 2011 8:13 pm

Quoting koruman (Reply 12):
I know that. But in terms of beyond-Asia carriage, Qantas will only be allowed to get into bed with Malaysia if it separates from BA first.

QF/BA just signed a new five year Joint Services Agreement last year.
 
rjm777ual
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RE: Report: Qantas Drops Plan To Create Asian Carrier

Mon Nov 28, 2011 9:08 pm

They could just partner with SQ and make a joint venture instead of making a whole new airline.
Greetings from Dulles!
 
koruman
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RE: Report: Qantas Drops Plan To Create Asian Carrier

Mon Nov 28, 2011 9:32 pm

BA/QF/MH would not get through because it is blatantly anti-competitive. Each carrier has more than 80% of its local long-haul market signed up to its frequent flyer program.

Yes, there are alternatives, but none of them achieves even 10% penetration of any of those long-haul markets in its frequent flyer program.

Borghetti has got Qantas on the run. He has taken from QF to DJ the idea of anti-competitive tie-ups to maximise market strength.

But the difference is that Virgin Australia can offer Singapore Airlines and Etihad to its passengers, while Qantas can only offer Malaysia Airlines and British Airways.

So there is a clear quality - and yield - gap between what Virgin can offer and what Qantas can offer.

Virgin is dancing with the supermodel who has a Ph.D. Qantas is dancing with the ugly individual with special needs.

Big difference!
 
Sydscott
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RE: Report: Qantas Drops Plan To Create Asian Carrier

Mon Nov 28, 2011 9:34 pm

Quoting EK413 (Reply 18):
Could you please elaborate as to why the SA/QF arrangement will cease beyond 2012?
Will this mean the return of SA to the east coast of Australia...?

If you want to read it from the horses mouth, here is the full IASC decision on the QF/SAA codeshare approval for the 2012 calendar year. The conclusion starting at page 16 is probably the best thing to read for a quick summary.

http://www.iasc.gov.au/determination...isions/files/2011/2011iascd220.pdf

Quoting huaiwei (Reply 32):
Can you substantiate this comment, particularly pertaining to SQ's objection?

I think what he is referring to is the media reporting in Australia that Singapore Airlines was lobbying the Singapore Government on the RedQ idea if it was to be based in Singapore. What the lobbing was about we don't know but I wouldn't call what they were doing anti-competitive as such. They were merely lobbying their Government in the same way every other airline was.
 
koruman
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RE: Report: Qantas Drops Plan To Create Asian Carrier

Mon Nov 28, 2011 10:31 pm

I think there is a distinct lack of realism about Red Rooster possibilities from either Singapore or Malaysia.

We first need to take a look at the geopolitical background. Qantas invested in Vietnam in Jetstar Pacific. What was the outcome? Two of its executives ended up in jail on trumped up charges, and the government forced the airline to get into bed with SkyTeam's Vietnam Airlines, which it owns.

Meanwhile the political context in Malaysia is to say the least interesting. The former PM Matahir Mohamad had a notoriously antagonistic relationship with Australia, whose former Prime Minister notoriously described him as "recalcitrant". This was around the time he put the deputy Prime Minister (from his own party!) on trial for sodomy, which sidelined him as a political threat. The same man is again on trial for the same sort of charge. Both of them have made pronouncements on Israel and Jews which are simply unprintable here.

As for Singapore, Qantas need to pay close attention to the situation there. It is true that Qantas and Jetstar have been allowed a limited niche as long as their benefits to Singapore outweigh the risks to the Singapore government's investments. Remember, Singapore has the outward veneer of a western democracy but upon closer examination the current government has 81 of the 87 seats in parliament and has won every election ever held since 1959, with the opposition subject to extraordinary restrictions. But at the end of the day, the Singapore Sovereign Wealth Fund (Temasek) owns 54% of Singapore Airlines, and if and when any Qantas investment - including Red Roo - starts to threaten that investment one might surmise that appropriate steps would be taken to protect that investment. Which is probably what the current lobbying in Singapore is.

If Qantas' business plan is sound, almost by definition it threatens the Singapore and Malaysia governments' investments in their own flag-carriers. And neither government has a tendency to be a shrinking violet in terms of protecting its assets.

Put differently, if Alan Joyce and Leigh Clifford had been running an airline in Singapore or Malaysia two months ago and had antagonised the government they way they did in Australia, at best they would now be unemployed and unemployable. And at worst, they would be sitting in their jail cells brushing up their legal defence against highly creative charges.

Business is done differently in Asia, especially in spheres such as aviation where governments control their flag carriers. In Australia we (hopefully) think nothing of Mr Joyce's private life, as we concentrate on what we like or dislike about how he does his job. But in Singapore and Malaysia the situation is entirely different.

[Edited 2011-11-28 14:41:11]
 
User avatar
mariner
Posts: 19473
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RE: Report: Qantas Drops Plan To Create Asian Carrier

Mon Nov 28, 2011 10:41 pm

Quoting koruman (Reply 37):
Put differently, if Alan Joyce and Leigh Clifford had been running an airline in Singapore or Malaysia two months ago and had antagonised the government they way they did in Australia, at best they would now be unemployed and unemployable. And at worst, they would be sitting in their jail cells brushing up their legal defence against highly creative charges.

I think it is extremely unlikely that a Singapore government would allow a union to do in Singapore what was being done to Qantas by the unions in Australia.

But - silly me - I keep forgetting you're on the side of the unions in this.

mariner
aeternum nauta
 
koruman
Posts: 2179
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RE: Report: Qantas Drops Plan To Create Asian Carrier

Tue Nov 29, 2011 12:24 am

Mariner, I quite agree, but I don't think the local unions will be the problem for Red Roo.  
 
AngMoh
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RE: Report: Qantas Drops Plan To Create Asian Carrier

Tue Nov 29, 2011 1:19 am

Quoting mariner (Reply 38):
Quoting koruman (Reply 37):
Put differently, if Alan Joyce and Leigh Clifford had been running an airline in Singapore or Malaysia two months ago and had antagonised the government they way they did in Australia, at best they would now be unemployed and unemployable. And at worst, they would be sitting in their jail cells brushing up their legal defence against highly creative charges.

I think it is extremely unlikely that a Singapore government would allow a union to do in Singapore what was being done to Qantas by the unions in Australia.

But - silly me - I keep forgetting you're on the side of the unions in this.

mariner

A couple of years ago the SQ pilots union got a bit aggressive and was threatening action. First Lee Kuan Yew himself stepped in, which was a big slap in the face of SQ management implying that they were not up to the job and next the head of the pilots union, who was a Malaysian, had is Singapoere permanent residence revoked "as he was no longer adding value to Singapore" and was given 2 weeks to leave Singapore. And as he was no longer allowed to work in Singapore, he was promptly fired from SQ for having breached his emploment contract which states that he needs to have the right to work in Singapore. Everyone immediately went back to he table to negotiate and it was settled quite quickly...
727 732 733 734 735 73G 738 739/ER 742 743 744/M 752 753 762 772 77E 773 77W 788 A300 A310 A319 A320 A321 A332 A333 A343 A345 A346 A359 A35K A388 DC-9 DC-10 MD11 MD81 MD82 MD87 F70 ERJ145 E170 E175 E190 E195 ATR72 Q400 CRJ200 CRJ700 CRJ900 BAE146 RJ85
 
Sydscott
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RE: Report: Qantas Drops Plan To Create Asian Carrier

Tue Nov 29, 2011 1:52 am

Quoting AngMoh (Reply 40):
Everyone immediately went back to he table to negotiate and it was settled quite quickly...

From an outcomes basis that seems quite reasonable. Isn't it amazing that both the Singapore and Australian systems want to reach the same outcome but the methods available to get there seem to have slight differences to the casual observer.............
 
docpepz
Posts: 1706
Joined: Thu May 24, 2001 8:20 pm

RE: Report: Qantas Drops Plan To Create Asian Carrier

Tue Nov 29, 2011 5:01 am

Quoting koruman (Reply 36):
As for Singapore, Qantas need to pay close attention to the situation there. It is true that Qantas and Jetstar have been allowed a limited niche as long as their benefits to Singapore outweigh the risks to the Singapore government's investments. Remember, Singapore has the outward veneer of a western democracy but upon closer examination the current government has 81 of the 87 seats in parliament and has won every election ever held since 1959, with the opposition subject to extraordinary restrictions. But at the end of the day, the Singapore Sovereign Wealth Fund (Temasek) owns 54% of Singapore Airlines, and if and when any Qantas investment - including Red Roo - starts to threaten that investment one might surmise that appropriate steps would be taken to protect that investment. Which is probably what the current lobbying in Singapore is.

Koruman - it's the same as SQ failing to demonstrate to the Australian government that the so called economic benefits to Australia by SQ operating SYD-LAX would outweigh the negative impact on Qantas. As if Qantas in 2005-2006 did not go on a massive PR campaign to keep SQ off the route, and why wouldn't they? SQ protested vehemently when QF basically hubbed all their flights to Europe and Asia ex SIN in the late 1990s. SQ probably hated the fact that their parent company invested in the startup of Jetstar Asia.

The Singapore aviation policy is enhancing traffic and connectivity through Singapore, and not on protecting any single airline. And thankfully it is, because SIA's marketshare in SIN has fallen from 50% 10 years ago to about 35% today. SQ's pax growth CAGR for the last 10 years was a meagre 1%. They barely grew as other airlines like Jetstar Asia did.

Qantas already has one sham "Singaporean" but Australian controlled Airline through Jetstar Asia. The 51% Singaporean owner is basically just a QF proxy who was given all the money to fund the company from Qantas.
 
Lufthansa
Posts: 2638
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RE: Report: Qantas Drops Plan To Create Asian Carrier

Tue Nov 29, 2011 7:14 am

There are two sides to that coin.

One could argue, it was singapore, who way back in the 1970s started stealing these routes and passengers from Qantas. Without connections to Australia and New Zealand, some very significant SIA destinations in europe would never have been viable as early as they were. So it indeed cuts both ways. But, without singapore having some kind of open skies approach, with the aim being to hub as many pax through there over protecting an individual company, SIA wouldn't have got as much foreign access either. So it very much works both ways. Yes QF have a shame 'singaporean airline'. But Singapore Air grew itself out of linking Europe with Australia, arguably at the expensive of Both European but particularly Australian carriers. I expect both to make lots of noise, everybody after all is entitled to try and get the best deal for their own personal interests. The Nation of singapore however, is not stupid. They do see a bigger threat. A threat that is powered by oil money. Every passenger going between Oceania and the Middle East and onto europe, is largely a passenger, and thus money, that probably would have previously selected to go through Singapore. I have no doubt they are acutely aware of this.
 
aviasian
Posts: 1244
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RE: Report: Qantas Drops Plan To Create Asian Carrier

Tue Nov 29, 2011 2:33 pm

Quoting Lufthansa (Reply 42):

How did SIA steal the routes and passengers from Qantas? SIA and other carriers such as Cathay Pacific, Thai, Malaysian Airline System worked hard on their products and services to earn the custom of these passengers and flew where the passengers wanted to.

Qantas has been given extensive and liberal rights to operate through Singapore to Europe since the 1930s ... SIA got none of that beyond Australia (not there there are too many places beyond Australia except South America and Antartica).

If Qantas wants to shift its hubbing arrangements to Kuala Lumpur, I am certain the SIA management would be willing to throw them a send-off dinner complete with lion dances, cymbals and gongs. And Qantas will also realise that its codeshare arrangement with Air France becomes just another worthless document that perhaps has the best residual value when sold on eBay.

And if it does indeed work out an equity swap or close alliance with Malaysia Airlines, it will find itself in a steep learning curve about how Malaysian politics work. It might need to introduce lots of glittering gold trappings in its premium classes in preparation for all the Datos, Datins, Tengkus and other title holders with clinking and clanking medals on their chests. And who knows how much these expect to pay for a ride in premium class.

Scoot obviously was established as much to play in a growing market of cost-conscious travellers as it is to counter (and perhaps curtail) the growth aspirations of Jetstar Asia Airways. Certainly SIA is not going to let Jetstar Asia achieve its 12/12 goal (12 destinations in China by 2012) without a fight.

And while one should never say never, I am certain that a Qantas/SIA deal or any form of partnership is absolutely impossible. There has been too much bad blood between both carriers and the SIA/Virgin Australia alliance seems to offer SIA all that it wanted in the Australian market. And there is great chemistry between John Borghetti and Goh Choon Phong ...

These are interesting times at Qantas and I hope that someone is taking note of all that has been said and done (and un-said and un-done) ... and someday write a very interesting non-fictional book about the red Kangaroo as its takes the final leap toward becoming a centenarian.

KC Sim

[Edited 2011-11-29 07:21:07]
 
JQflightie
Posts: 548
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RE: Report: Qantas Drops Plan To Create Asian Carrier

Tue Nov 29, 2011 3:54 pm

I think KUL has a good chance....... MH has just re-absorbed FY (FireFly) Jet B738/B734 services back into MH Mainline as part of its 're-structure' ...... so there is room for another carrier.

The only thing out of all this new 'Asian Carrier' is, while QF may Interline with them, nothing has been mentioned about Code-Sharing or OneWorld membership. And QF doesnt fly to KUL on its own metal to get pax there, and would have to heavily rely on MH,

SIN would be the best place for this new airline, as its already a hub and would make sence, but then again, somethings in this industry just dont make sence!

Personally, i think anyway a airline can grow is good, even if its a wholly owned subsidary of QF, the profits are going to come back home to us, and as a employee of QF, i welcome that! It keeps my job secure back here in Australia.

And insiders know who the CEO is already, so this plan is going ahead, maybe put on the shelf for a few months, but going ahead, until AJ says otherwise, its really a dead-end Topic.
When is my next holiday?
 
User avatar
huaiwei
Posts: 359
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RE: Report: Qantas Drops Plan To Create Asian Carrier

Tue Nov 29, 2011 4:45 pm

Quoting sydscott (Reply 35):
I think what he is referring to is the media reporting in Australia that Singapore Airlines was lobbying the Singapore Government on the RedQ idea if it was to be based in Singapore. What the lobbing was about we don't know but I wouldn't call what they were doing anti-competitive as such. They were merely lobbying their Government in the same way every other airline was.

If they did lobby, that piece of news was not reported in any local paper (which they normally will), and I noticed it was mainly sourced from just one Australian paper. Credibility remains suspect, and even if it was true, the Singapore government is hardly likely to give two hoots other than to probably remind the Australians that the transpac route out of SYD is still closed to SQ.

Quoting koruman (Reply 36):
Meanwhile the political context in Malaysia is to say the least interesting. The former PM Matahir Mohamad had a notoriously antagonistic relationship with Australia, whose former Prime Minister notoriously described him as "recalcitrant". This was around the time he put the deputy Prime Minister (from his own party!) on trial for sodomy, which sidelined him as a political threat. The same man is again on trial for the same sort of charge. Both of them have made pronouncements on Israel and Jews which are simply unprintable here.

You need serious updating in your understanding of geopolitics outside Australia. Dr M, for all his continued post-PM antics, is no longer a powerful force in Malaysia today. That Malaysia and Singapore could resolve the railway land, water and causeway issues, plus recent intense lobbying for more Singapore investments in Johor and on-going negotiations for Singapore's MRT to be extended into Johor in recent years is testimony to that, all of which would be unthinkable less than 3 years ago. Economic realities still take centre stage even in the worse of times, so I hardly consider this a factor to be considered.

Quoting koruman (Reply 36):
As for Singapore, Qantas need to pay close attention to the situation there. It is true that Qantas and Jetstar have been allowed a limited niche as long as their benefits to Singapore outweigh the risks to the Singapore government's investments. Remember, Singapore has the outward veneer of a western democracy but upon closer examination the current government has 81 of the 87 seats in parliament and has won every election ever held since 1959, with the opposition subject to extraordinary restrictions. But at the end of the day, the Singapore Sovereign Wealth Fund (Temasek) owns 54% of Singapore Airlines, and if and when any Qantas investment - including Red Roo - starts to threaten that investment one might surmise that appropriate steps would be taken to protect that investment. Which is probably what the current lobbying in Singapore is.

Oh right. So in elections where the PAP wins more votes, QF should be more "careful", while it can be less careful when the PAP gets a beating? Get real. If anything, numerous businesses are attracted to Singapore precisely due to the stable political climate and consistent policies which are business friendly, as it is also to QF. Every government places their national interests first, but as has already been well documented, Singapore considers the interests of SQ second behind the need to build a thriving aviation hub. At the end of the day, it is still protecting Singapore's interests, albeit at a larger national scale than to protect one single company. The value of Temasek's investments, btw, are purely secondary as well, because the primary goal of Temasek is to increase Singapore's ballooning reserves, rather than to protect local companies.

Singapore does not have an outward veneer of a western democracy. We never pretended or claimed to be one, and we even have to routinely defend our style of democracy.

Btw, may I remind that 81 out of 87 seats appears overwhelming, but it is the result of a first-past-the-post voting system which hides the fact that the PAP actually received only 60% of votes in this year's GE, which was described as a watershed election. In the recent presidential elections, the candidate seen to be supported by the ruling party won with 35.20% of the votes, just 0.35% more than the next candidate and showed 64.8% of the population willing to vote for someone not preferred by the ruling party. Amazing performance for a country with "extraordinary restrictions" on free elections?

Quoting koruman (Reply 36):
If Qantas' business plan is sound, almost by definition it threatens the Singapore and Malaysia governments' investments in their own flag-carriers. And neither government has a tendency to be a shrinking violet in terms of protecting its assets.

Simplistic assumptions here. Protectionism is far more prevalent in Malaysia than in Singapore, and Temasek Holdings has never tried to "protect its assets" other than to make investment adjustments like any independent fund manager would, with hardly any direct intervention in the companies they invested in.

Quoting Lufthansa (Reply 42):
One could argue, it was singapore, who way back in the 1970s started stealing these routes and passengers from Qantas.

"Steal" is a ridiculous word to use in an open market, for every other airline in an open market environment can very well do the same just as QF could have also done so by flying passengers from SIN to onward destinations. And if SQ is to be blamed for "stealing" first, let's not forget Qantas is a much older airline who has "stolen" air traffic into and out of Singapore and numerous other places for many decades prior.

[Edited 2011-11-29 08:48:11]
It's huaiwei...not huawei. I have nothing to do with the PRC! :)
 
mogandoCI
Posts: 1247
Joined: Thu Jun 04, 2009 2:39 pm

RE: Report: Qantas Drops Plan To Create Asian Carrier

Tue Nov 29, 2011 5:02 pm

Quoting JQflightie (Reply 44):
SIN would be the best place for this new airline, as its already a hub and would make sence, but then again, somethings in this industry just dont make sence!

SIN is actually not that good.

1. It's far from the largest growing market - China.
2. You're bombarded with LCCs such as Tiger, AirAsia, HongKongAirlines etc
3. You'll overlap with jetStar Asia significantly
4. You'll be going heads-up against one of the best airlines in the world - SQ
5. it's hard to have a "premium airline" on routes that average 2-3 hours long.

if their objective is a SIN-based scissor hub that routes east Asia to DownUnder, then SIN is good. if they're trying to go for O&D, that's a pain.
 
User avatar
huaiwei
Posts: 359
Joined: Fri Oct 03, 2008 4:36 am

RE: Report: Qantas Drops Plan To Create Asian Carrier

Tue Nov 29, 2011 8:23 pm

Quoting mogandoCI (Reply 46):
1. It's far from the largest growing market - China.

SIN is smack in the middle of the Southeast Asian market of nearly 600 million people, and the epicentre of the three markets of China, India and Australia. Singapore is less than 4 hours to Southern China.

Quoting mogandoCI (Reply 46):
2. You're bombarded with LCCs such as Tiger, AirAsia, HongKongAirlines etc

Name me a major economic location which has a relatively liberal aviation market and yet is not inundated by LCCs.

Quoting mogandoCI (Reply 46):
3. You'll overlap with jetStar Asia significantly

The LCC and full service segments are different markets, if properly managed. SQ, MI, TR are all able to co-exist and thrive, and the upcoming Scoot is expected to thrive too. QF is simply doing something similar, which is to plug the gap of not having a bigger full-service presence in Asia comparable to JetStar.

Quoting mogandoCI (Reply 46):
4. You'll be going heads-up against one of the best airlines in the world - SQ

Singaporeans love to travel and are famously pragmatic when it comes to choosing airlines. There may be only five million people here on paper, but Singaporeans actually make up 40% of SQ's clientèle, which means about 7 million Singaporeans trips were made on SQ per year. If you add in all the Singaporeans travelling in the other airlines particularly the LCCs, you can imagine how big that market is. SQ is hardly going to kill every competitor.

Quoting mogandoCI (Reply 46):
5. it's hard to have a "premium airline" on routes that average 2-3 hours long.

If you said "China is far from Singapore", than I am not sure why this is an issue. SQ is able to operate to destinations as close as 25 mins away, and still charge passengers a premium even with 3 LCCs on the same route.

Quoting mogandoCI (Reply 46):
if their objective is a SIN-based scissor hub that routes east Asia to DownUnder, then SIN is good. if they're trying to go for O&D, that's a pain.

The O&D market in SIN is far bigger than the East Asia - SIN - Australia market, and possibly even the East Asia - Australia market as a whole.

I think you seriously need to realise SIN is not a DXB.
It's huaiwei...not huawei. I have nothing to do with the PRC! :)

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