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Howard protects Qantas.

Discussion in 'Open Discussion' started by BlacKnox, Jun 11, 2005.

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  1. BlacKnox

    BlacKnox Active Member

    Jan 29, 2005
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    The Howard Government will continue to protect Qantas from extra competition (Singapore) on its lucrative Pacific route, as it launches a wholesale review of the aviation industry. For the full story, go to:

    http://finance.news.com.au/story/0,10166,15577028-462,00.html

    "Singapore, after three years of lobbying, said it was disappointed "but not surprised" by the decision". Me too.
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  2. danielh

    danielh Member

    Dec 5, 2003
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    Well I've got quite a few Qantas shares so from my biased point of view, YAY!!!!

    :)

    Regards
    Daniel
     


  3. duffshot

    duffshot Member

    Apr 27, 2005
    121
    0
    Brisbane
    Now do you think all those Chariman's club memberships for pollies had anything at all to do with the decision? :roll:

    Call me crazy, but I think there may be a few pollies who lobby quite hard on QF's behalf, and it's possible they do it because of the priveleges they get. :shock:

    No seriously - I think they might, as hard as it is to believe that a pollie would do such a thing :wink:
     
  4. Yada Yada

    Yada Yada Established Member

    Dec 6, 2004
    1,872
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    1F
    Sad, but typical. Our politicians have no shame.
     
  5. BlacKnox

    BlacKnox Active Member

    Jan 29, 2005
    732
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    Today I read online www.news.com.au that several MPs are discussing/ researching/ considering a merger between Qantas and Singapore Air. Anything in the Australian media about this?
     


  6. BlacKnox

    BlacKnox Active Member

    Jan 29, 2005
    732
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    Yes - Sounds like smart business to me (on QF's behalf).

    Latest headline reads "Airlines deny merger talk". Can't read the article now as the news.com.au server is down. What's the news in Oz?
     
  7. neil_gardner

    neil_gardner Intern

    Nov 26, 2004
    78
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    shanghai, PRC
    Is it just me or does anyone else think that Qantas are walking on thin ice here.

    On the one hand protecting themselves by denying SIA access to the Pacific routes. On the other hand, having all of their European international flights connect through Changi ......

    At what point does SIA become childish and deny additional slots, up the price of new slots or offer revised timings of current slots to more unfavourable times of the day which would completely have Qantas in a pickle.

    Maybe the Singaporeans aren't that bitter and twisted...maybe it's just me that thinks that way... :wink:
     
  8. thadocta

    thadocta Active Member

    Firstly, SIN airport is not operated by SQ, so SQ would not be able to affect QF operations there (not directly anyway).

    Secondly, QF is worth more to SIN (both airport and country) than SIN is worth to QF. If SIN was to start playing silly buggers, QF could easily relocate their SE Asian hub elsewhere, KUL springs to mind. This would not be financially advantageous to SIN (both airport and country).

    Thirdly, it was because of a lot of wok on the part of SIN (both airport and country) that QF located their hub in SIN. They did this hard work for a reason, they could see the extra $$$$$ that would come in. They would not now like to see this hard work wasted.

    Dave
     
  9. dajop

    dajop Senior Member

    Jul 1, 2002
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    Interesting, and quite scathing article & editorial in AFR last Friday about the decision to defer this decision. Talked about QF's threat to take jobs ashore (which they are proceeding with anyway), and drew comparisons to other industries in which deregulation has already taken place and jobs have already moved offshore, to the short term detriment of some specific parts of Australia, but generally considered beneficial to the national interest in the long run. Also singled out MEL and BNE as particular cities that such that the govts decision would disadvantage.

    Can't help but agree that whilst shareholders of QF may suffer in short term, that in the long run increased "quality" competition (ie not UA) on the US route will lower prices for other Australian businesses and ultimately there would be net gain (also increasing potential for tourism from US to AUS).
     
  10. BlacKnox

    BlacKnox Active Member

    Jan 29, 2005
    732
    13
    Latest development:

    Singapore 'no sure thing'

    By David King
    June 27, 2005
    From: www.news.com.au

    QANTAS will merge with another international carrier within five to 10 years - but it would not necessarily be Singapore Airlines.
    After a week of speculation by politicians about a possible deal with the Singaporean carrier, Qantas chief executive Geoff Dixon moved to quash rumours of an imminent alliance.

    "There is no particular issue of Singapore Airlines and Qantas; there'll be Qantas and someone else," Mr Dixon told the Nine Network's Business Sunday program.

    "Five years time, 10 years time ... I think we will be in some association with another carrier. Advertisement:


    "'I believe Singapore Airlines are a wonderful carrier ... would be a lovely partner but so would British Airways, so would Cathay Pacific, so would a lot of carriers out there."

    Prime Minister John Howard revealed last week that he had discussed a possible merger with his Singapore counterpart, Lee Hsien Loong, in a private conversation two weeks ago.

    Also last week, Treasurer Peter Costello said the Government should consider lifting foreign investment restrictions on Qantas.

    The Treasurer's comments came as the chairman of Middle East carrier Emirates, Sheik Ahmed bin Saeed Al-Maktoum, said he would be interested in Qantas if the 49 per cent limit on foreign investment were changed.

    The Government is reviewing the Qantas Sale Act, which prohibits any single airline from owning more than 25 per cent of Qantas.

    However, the Foreign Acquisitions & Takeovers Act prohibits an Australian international airline being more than 49 per cent foreign owned.

    The Foreign Investment Review Board would have to decide if an overseas company could pass that ownership cap.

    While the Treasurer is keen to explore the idea of foreign control of Qantas, sources close to outgoing Transport Minister John Anderson said yesterday there was "no possibility whatsoever" that Qantas would be foreign-owned.

    Mr Dixon, who supports the removal of all ownership restrictions, said the Qantas brand would be kept in the event of a merger.

    "I think any merger that involved Qantas and any other airline would have to involve two brands, two separate entities, in a dual listing type operation," he said.

    "I cannot see, despite some of the things being said in the last few weeks, Australia allowing Qantas to disappear or the brand to disappear."

    The Government has shelved a decision on whether to allow Singapore Airlines to fly on Qantas's most lucrative aviation route between Australia and the US.

    Also yesterday, Mr Dixon payed tribute to Mr Anderson, saying the airline industry was losing an ally in cabinet.

    "You could say a good ally for Qantas but I believe he has been a good ally for the industry."
     
  11. Kiwi Flyer

    Kiwi Flyer Senior Member

    Sep 24, 2004
    5,453
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    I just about choked reading this
     
  12. BlacKnox

    BlacKnox Active Member

    Jan 29, 2005
    732
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    SingAir, Qantas tie-up urged

    SingAir, Qantas tie-up urged
    July 10, 2005
    From: www.news.com.au

    SINGAPORE Airlines chief Chew Choon Seng says the international airline industry is due for consolidation and Qantas and Singapore Airlines would benefit from at least sharing some facilities.

    "The industry is due for consolidation," the CEO told Channel 9's Business Sunday today. He said the industry was expected to make a $US6 billion ($8bn) annual loss when oil prices were below $US50 a barrel. Oil prices are now around $60 per barrel.

    "This cannot go on indefinitely," Mr Chew said.

    Singapore's Transport Minister, Yeo Cheow Tong, told Business Sunday that Qantas and Singapore Airlines should be encouraged to talk to each other.

    "I don't see the two airlines agreeing to a merger at this point of time because there are many, many issues to be discussed," Mr Yeo said.

    "But hopefully as time passes Australian regulators will appreciate better what's happened on the international scene and the fact that the Australian market is actually quite competitive.

    "They may agree to a merger between Qantas and one of the other airlines serving Australia, whether its Singapore Airlines or another airline."

    Mr Chew said Qantas and Singapore Airlines had made comments last year about talks going on in relation to the sharing of maintenance facilities for the new Airbus 380 super jumbo.

    "It makes sense that neither of us duplicate facilities, but rather put our heads together and see where we can have joint efforts and share facilities and thereby spread costs," he said.

    Mr Chew said the international airline industry should not be constrained and should be allowed to operate like many other major businesses in the world.

    However, the airline industry was an industry where strict lines were drawn across national boundaries.

    "Therefore the idea of a merger is an appealing one in economic philosophy, but it's an idea before its time, unfortunately," Mr Chew said.

    Last month, Qantas Airways chief executive Geoff Dixon said the airline was likely to merge with a foreign carrier in the next five to 10 years.

    But he said Qantas was not likely to surrender its identity as an Australian carrier and that any merger would likely take for the form of a dual-listed structure.

    Mr Dixon played down as "hypothetical" suggestions by Prime Minister John Howard and then incoming Deputy Prime Minister Mark Vaile of a merger with Singapore Airlines.
     
  13. Silly question - but don't US flagged carriers have access to the US to AU routes now? I know that Continental had route authorities but switched to codeshares with QF (apart from the GUM-CNS route). It would seem to me that if there really was alot of extra potential other US airlines would add service - as it is we have UA which does well out of the routes (but not well enough for direct flights into MEL any more), HA with its Hawaii to SYD flights on a 763, and CO with the CNS flights. NZ terminated direct US to AU flights as well in favour of via AKL routes.

    Of the remaining US majors AA and US would be less likely to compete on the route due to their alliances with QF and UA however none of the Skyteam airlines fly the route so DL, CO, or NW would all have potential gains from adding this route (especially as it is an alliance blackspot) however none of them seem to want to. In fact now that CO is part of SkyTeam the partnership with QF should be on the way out so there might be more encouragement for them to add LAX-SYD 772 service (or at least Hawaii to SYD service). NW has plently of 744's they could use as well.

    I can't help thinking SIngapore Air would be more likely to canabalize QF & UA's market share than really building extra capacity in the long term (and of course adding another StarAlliance airline really doesn't help competition that much when you factor in codeshares etc - more likely to end up replacing UA after canabalizing its base).

    Being an Australian in the US I know that lots of people are interested in travel to Australia but are put off not by the cost but rather by the travel time. They also, by and large prefer US carriers (and then QF) to asian carriers for perceived safety and security issues so I can't see the mass of tourist class pax switching to Singapore unless they sell tickets at uneconomic levels.

    I don't think QF and Singapore Air make a good fit and in fact think QF merging with another international airline (apart from NZ) would be foolish as its image / brand value just don't translate well - outside of Australia & New Zealand I can't see a Kangaroo conveying any real meaning and otherwise would they adopt the other airlines name (can you imagine the AU reaction if QF became 'British Airways' !) or make up some stupid hybrid, or worst of all keep operating with both names and therefore gain little benefit. One of the great things about the last decade is that the industry finally realized that you didn't need to try to span the globe with your own metal (a la TWA & Pan Am in the old days) and instead could make alliances / codeshares to offer service in places it wouldn't be viable for you to try to run yourself - if QF goes back on that philosophy I would be very annoyed (and I am a shareholder) Finally if QF and Singapore merged which alliance would they be in - logically it would be 1world but then Singapore would have to pay the exit fee and would immediately get more regional competition from Thai, ANA, and NZ than currently...
     
  14. AlwaysUpThere

    AlwaysUpThere Member

    Nov 25, 2004
    126
    0
    Sydney
    Moving back to the origins of this thread...

    When most federal government departments use Qantas as their TRAVEL AGENT, how does any other airline expect to get a crack at the Government business? If they put in a cheaper quote and, surprise surprise, Qantas comes back with a "Governemnt Only" special fare, a few dollars cheaper. This then allows the travelles to use QF under the "Best Fare of the Day" (BFOD) policy. Knowing Qantas will do this, airlines become reluctant to bid for the business, and so QF end up with it all by default...and the taxpayers line QF's pockets...

    Sure, Virgin Blue pulled of CBR routes as a result of Qantas (Qantas Business Travel) being their agent , but think of all the international travel that is being undertaken at artificially high, certainly not market competitve, prices?

    Why doesn't the ACCC have a look at that practice, or are they all Chairman's Club cardholders too???


    As an additional point, what happens to the QF/BA Joint Service Agreement if QF and SIA merge?
     
  15. dajop

    dajop Senior Member

    Jul 1, 2002
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    Rest of your argument not withstanding, Virgin Blue did not pull out of all Canberra routes. Only CBR-SYD, it still has triple daily flights CBR-BNE/MEL and single daily to ADL. It pulled out of SYD because 1 flight a day isn't competitive with 25 flights a day, and it's also not efficient to operate that aircraft on such a short sector.

    Rex on the other hand had a higher frequency than DJ (still well below QF offering) and aircraft more suited to the route. They cited the QF/govt deal as one of the reasons it pulled out from both CBR/SYD and CBR/MEL(if you go back in history) routes.
     
  16. serfty

    Moderator

    Nov 16, 2004
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    More than that, I know of one large government institution that gets an additional percentage off all Qantas fares purchased; this is irrespective of class or fare. I won't quote the exact figure, but it is significantly more than 10%.

    e.g. on a $1200 BNE-SYD return J fare, the actual amount paid (as part of an overall monthly invoice) may be under $1000.
     
  17. danielh

    danielh Member

    Dec 5, 2003
    352
    0
    Actually discounts are not that hard to get. Most large organisations make arrangements with their travel provider to get a discount on flights booked with Qantas.

    I think that a fully Flex return MLB-SYD = $795 less discount of about $113 to make it about $660ish.

    It depends ont he organisation and how often their employees fly.

    Regards
    Daniel
     
  18. dajop

    dajop Senior Member

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    Act the risk of being pedantic (well actually no risk really I am being pedantic), do you realise that MLB is the airport code for Melbourne, Florida, USA? $795 very cheap for a return flight from Florida to Sydney. :wink:
     
  19. AlwaysUpThere

    AlwaysUpThere Member

    Nov 25, 2004
    126
    0
    Sydney
    You're right - any organisation with enough travel can get a corporate deal, be it through the Travel Management Company, direct to the airlines in one country, multipe countries or as part of an alliance deal (Like a Star Alliance or oneworld Croporate Deal). The majroity of airlines give their clients a range of benefits - discounts from published fares, route specific prices, "soft benefits" like the Chairman's Card, upgrades, rebates etc.

    The point is that when a government department has a "Best Fare of the Day" policy and Qantas are both the travel agent and a potential airline service provider there is no integrity in the process. Its like the fox being given access to the chicken coop to collect eggs - he's got one primary role, yet has a great opportunity to take advantage of the situation!
     
  20. BlacKnox

    BlacKnox Active Member

    Jan 29, 2005
    732
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    Qantas may be shielded

    By Katharine Murphy
    06-12-2005
    From: The Australian
    http://finance.news.com.au/story/0,10166,17476770-462,00.html
     
    "ENVIRONMENT Minister Ian Campbell has declared himself emphatically pro-Qantas ahead of a cabinet ruling on whether to expose Australia's national carrier to greater competition.

    In comments that put him strongly at odds with his West Australian partyroom colleagues, Senator Campbell said yesterday that the Government needed to be extremely careful about exposing Qantas (qan.ASX:Quote,News) to more competition at a time when the international market was more than usually challenging.

    "We have to think very carefully about Australia's national interests when we're trading in access to a very lucrative world market," he told The Australian.

    Asked whether he meant that Qantas (qan.ASX:Quote,News) should be protected from competition on its most lucrative aviation route, Senator Campbell replied: "Yes."

    The minister's comments came as Virgin Blue (vba.ASX:Quote,News) intensified its political lobbying to shut Singapore Airlines out of the Pacific route between Australia and the US.

    Virgin chief executive Brett Godfrey told a closed-door meeting of Coalition MPs in Canberra that the Howard Government would be better off if it allowed two Australian carriers - Virgin and Qantas - to fly the Pacific route, rather than a "foreign" entity such as Singapore Airlines.

    Mr Godfrey has met cabinet ministers and senior Coalition staff to urge the Government to give Virgin Blue seven aircraft slots a week between the east coast of Australia and the US.

    Virgin Blue (vba.ASX:Quote,News) has made it clear it would not be viable for the airline to fly the route if cabinet cleared the way for a big carrier such as Singapore Airlines to go head-to-head with Qantas.

    Mr Godfrey met senior staff of Tourism Minister Ian Macfarlane yesterday.

    Mr Macfarlane, who favours more competition on the Pacific route, provided it can be managed without damaging Qantas, told The Australian he believed a compromise could be reached.

    "As in any commercial negotiation, there will be an acceptable halfway point which means greater tourism but also preservation of what is an iconic Australian operation," he said".
    --------------------------------------------------------------------------------------

    I didn't know Virgin Blue had been lobbying for this route until reading this. Agree with the basic premise that competition is needed, though undecided whether it should be 2 Australian carriers or SQ and QF.
     
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