Singapore Airlines and Flight Centre falling out ?

[NM]

I could easily imagine what you are saying is correct. But there would be limited places you could fly since you would need the 6th freedom rights would you not and all flights would have some origin elsewhere ? That i could imagine would limit the desire for people to do it.
Or am i just thinking crazy ?

not sure what you are meaning???

If they establish an Australian company called, say, Singapore Airlines Australia, which is an Australian company owned by SIA or Temasek or whoever, it is my understanding they can apply for an Australian AOC and operate to any country that any Australian airline can operate to (with the appropriate regulatory approvals). of course this would require them to operate aircraft with Australian VH registrations for such services unless that can be overcome through a wet leasing arrangement???

As far as I am aware, Qantas is the only Australian airline that has any legal requirements to retain a minimum proportion of Australian ownership do to the laws set in place around the original privatisation of the airline.

But I could be wrong in my assumption and such ownership requirements may apply to other Australian airlines wishing to operate international services.

 

[Evan]

Yep, i am going crazy, now what you said makes perfect sense.
Sure i don't see why that would not work. Isn;t this how tiger work exactly now ? And a wet lease is from a company with an AU AOC anyway so no issues there.

 

[Nigelinoz]

The way I see it there can only be one winner in this stoush and it isn't flight centre,after all if I went to a flight centre and asked them to book flights on SQ and they refused I would simply take my business to an agent who would do what I asked,or I would book online.
Flight centre has much more to lose than SQ IMHO.

 

[FL360]

As a matter of fact I am now booking an international return flight in Aug on SQ (we all love specials), I was just comparing the final price between SQ.com and Cheap flights, accommodation, holiday packages, hire cars - travel.com.au and realise the final price from them is actually cheaper than SQ.com by about $10.

If Cheap flights, accommodation, holiday packages, hire cars - travel.com.au can do a price like this, I am surprised that FC cannot !

Anyway, because I don't work for Cheap flights, accommodation, holiday packages, hire cars - travel.com.au, are there any other web-sites which do similar things so I can check their prices as well ?
(so I don't sounds like an ad)

 

[Travel Guru]

The way I see it there can only be one winner in this stoush and it isn't flight centre,after all if I went to a flight centre and asked them to book flights on SQ and they refused I would simply take my business to an agent who would do what I asked,or I would book online.
Flight centre has much more to lose than SQ IMHO.

It's actually probably not as bad for FC as you'd imagine.

You'd be surprised how few clients are actually completely set on who they want to fly with, most FC clients are very price driven and even if they come in wanting SQ, often times they'll walk out the door flying MH, QF, EK or some other comparable airline simply because they could save themselves a few dollars by switching.

It's relatively easy for an agent to sway a client (the majority of them anyway), so im my mind they haven't got anywhere near as much to lose as SQ who are now forced to spend more on marketing than they did when they had FC doing the work for them.

SQ generally sell their tickets on their website $30 above the nett fare offered to agents, so if travel.com.au is selling it for $10 below SQ then they're making around $20 per ticket on the sale, which might be okay for an online agency, but it's simply not worth it and not profitable or sustainable for a bricks and morter agent like FC to sell seats that cheap.

TG

 

[Dougo]

"It's relatively easy for an agent to sway a client (the majority of them anyway)"

Sounds a bit like FC uses "smoke and mirrors" TG !!!!

 

[oz_mark]

I didn't think there was any restriction on the ownership so long as they have the appropriate corporate structure in Australia and the AOC. But I don't know for certain and it would be interesting to have to clarified if anyone knows for certain.

From what I can see under the eligibilty requirements for an International Airline Licence it is max 49% foreign owned

Ownership provisions require that:
Foreign shareholdings be limited to no more than 49 per cent of the total value of the issued share capital of the Australian airline.

(I've been googling )

 

[NM]

From what I can see under the eligibilty requirements for an International Airline Licence it is max 49% foreign owned

that would indeed seem to clarify it. So Sir Richard is limited to a max ownership of 49% of Virgin Blue Holdings even if wants to splurge on some well priced shares.

I understand there is a 49% cap on Qantas' ownership of JetStar Asia etc for similar reasons.

So if Qantas can buy into JetStar Asia in order to operate in countries outside Australia, then I guess SIA can establish a similar arrangement here with a 49% ownership and operate as an Australian airline.

(I've been googling )

Thanks. I was hoping someone would. I was too busy to go looking myself.

 

[Nigelinoz]

Looks like the divorce is finalised.
Flight Centre kisses SIA goodbye-25 June, 2009

Flight Centre kisses SIA goodbye
BRISBANE - Flight Centre has dumped Singapore Airline as a preferred supplier.

It will continue to sell Singapore Airlines’ fares but has formally ended 2009-2010 preferred contract negotiations with the airline.

The news is no surprise. Last month the retailer took Singapore Airlines off its list of 40 preferred airlines, and told staff to stop promoting SIA to clients.

Flight Centre managing director Graham Turner told staff, "These poor economic times give us a chance to get at and punish those carriers (only one or two) who are trying to undercut us on the web, thus costing us in price beats”, referring to Flight Centre's policy to beat any cheaper available price.

Now, after four months of negotiations, Flight Centre advised SIA’s management that the airline's preferred supplier agreement would not be renewed.

 

[AI-Exper]

Ideally we should pay a fee for service to the travel agent. Maybe then they will actually provide some service? I found the one I booked my flight to be completely hopeless so far.

 

[NM]

Ok, this may be controversial, but I think the main problem here is Flight Centre's marketing campaign that they will beat anyone else's price quote, including on-line airline web bookings.

I much prefer to deal with a company that advertises and offers the best price up-front, rather than one that says they will best someone else's price. I rarely (in fact can only think of two occasions) ask one company to price match or beat another's quote. And I am turned away from a company that advertises that they will beat anyone else's price. That just tells me that they are not offering me their best deal. I will deal with the one that offers me the best deal directly or the one that puts in the effort in the selling process.

So if the problem for FC is that they are losing money by matching/beating the airline's own web-deals, then they need to change their marketing campaign and show different ways of adding value to the products they sell. Being the cheapest retailer is one way to add value, but its also a good way to end up with poor financial results.

I believe there are two types of customers, those looking for the lowest price and those willing to pay for value and good service. If your target market is the first group, then expect to operate with very low margins and as a result need to sell very high volumes. If you target market is the second group, then volumes may be lower but margins higher. Both models can be profitable and both models have their risks. FC seems to want to target the first group and has been willing to sacrifice margin for volume through their marketing campaign of price matching/beating. They have now found that their campaign means they sometimes have to sell at a loss, and when selling at a loss the bigger volume you have the bigger the loss becomes!

It is my view that their campaign to offer to beat anyone else's price that is the underlying problem.

 

[drron]

Not contraversial with me NM.I agree with your analysis.I also am not in the lowest possible price group.I much prefer an agent who can go that extra mile such as finding a room in a booked out city such as Darwin was last weekend.

 

[FL360]

Their ad should be like this :

Flight centre - we go the extra mile to help you find the best deal and travel plans#

Our low price promise - If you happen to find a cheaper available price, we’ll beat it.^

# abilities varies depends on the store and the TA who serves you
^ only with partner airlines who agrees with our business model.

:mrgreen::mrgreen::mrgreen:

 

[harvyk]

Their ad should be like this :
# abilities varies depends on the store and the TA who serves you

But that's the case with all TA's. As far as I'm concerned the value comes from the person your dealing with, not the company itself (for the most part).

I for one use FC a lot... But that's because I know the TA who usually does all my bookings very well, they will happily get the prices off the QF website which allows me to purchase them without CC fees, and they can usually find hotels etc at good rates...

 

[odysseus]

I for one use FC a lot... But that's because I know the TA who usually does all my bookings very well, they will happily get the prices off the QF website which allows me to purchase them without CC fees,

But then they charge CC fees themselves...?

 

[Flashback]

But then they charge CC fees themselves...?

Was wondering the same thing myself......

 

[JohnK]

I think there is some added value through purchasing through a (good) TA, as in the after-sales service, but would concede that this is becoming less necessary as the internet becomes a more and more popular tool for booking travel.

Not everyone books simple returns or purchases standard RTW products advertised by the alliances. There are more complex itineraries and even mix and match itineraries which are available through travel agents. It would be a sad day if travel agents disappear altogether and the only option is to book on the internet directly with the airline or online travel agents.

• Some people do not want to spend their valuable time researching airfares on the internet to save a few $$
• Some people have built a very good relationship with their travel agent over a number of years (may not always be the cheapest but you know you will get the best service)
• Trying to book a SYD-SKG return online would cost $400+ more than what is available through some travel agents (that is one example I am sure there are many more)
• RTW airfares that are not linked to an alliance (not everyone cares about status and FF points and would rather have the cheapest airfare with best connections)
• Open jaws that are simply not available online
• Occasionally travel agents have access to some packages/deals that are not able to be booked online

 

[FL360]

I disagree, for some airlines, such as QA and BA, you can book multi cities / open jaw online, with pretty much the same price, I have booked HKG=>LHR, and FCO=>HKG with them online at the same price level... I am sure you can do the same online with some other airlines.

I guess why some of us are angry with TA is that they advertise that they can give us a good / cheapest deal, however when Pax ask for simple and cheap flights routes they are often offered the tic which yields them most commission, rather than the cheapest for the customer....

• Open jaws that are simply not available online

 

[drron]

I disagree, for some airlines, such as QA and BA, you can book multi cities / open jaw online, with pretty much the same price, I have booked HKG=>LHR, and FCO=>HKG with them online at the same price level... I am sure you can do the same online with some other airlines.

I guess why some of us are angry with TA is that they advertise that they can give us a good / cheapest deal, however when Pax ask for simple and cheap flights routes they are often offered the tic which yields them most commission, rather than the cheapest for the customer....

Lets just agree we are all different.I still use a TA.She is good,knows her stuff but i can still teach her things about loyalty programs.For flights she charges a fee not commission.Why do I use her when i could pay a little less doing it myself on line-
1.Saves time-too busy posting on AFF
2.I can get a confirmrd booking 11 months out but only pay for it 1 month out but knowing I will be informed of any price changes.Saves enough on the overdraft to make up for the fee.believe me Type a's need to book early.
3.If plans go belly up it is all taken care of automatically.
4.ability to get me in to booked out accomadation.
5.Learning of specials before anyone else.One that i will always remember is being on a cruise liner in sydney harbour on 25,26/1/88 that was acting as one of the marker buoys for the tall ships.One of the few non TAs on board.
So at present i will still be using my TA for most airfares and some accomadation-SPG and Hilton I book online.

 

[JohnK]

I disagree, for some airlines, such as QA and BA, you can book multi cities / open jaw online, with pretty much the same price, I have booked HKG=>LHR, and FCO=>HKG with them online at the same price level... I am sure you can do the same online with some other airlines.

We all have different experiences dealing with any company. I have never had an issue with a travel agent. I find most of them professional and willing to help out in any way possible but to be honest I have had limited contact with Flight Centre, Harvey World Travel or the bigger chains. Sure I do most of my bookings online but sometimes a travel agent is required and it is good to build a good relationship with a travel agent or have someone recommend a good one.

As for open jaws it is not always possible to get the best airfare online. Around 12 months ago a friend wanted to travel SYD-PVG//HKG-SYD. I searched online and could not find a decent open jaw or even return airfare. He was travelling with his employee who recommended a local travel agent to him and they were able to get a deal with QF for ~$1250. Unless you know the right tricks this is almost impossible to book online and match that airfare.