SQ's bid for Aus - US flights rejected

[N860CR]

Well no real supprise, but just heard Singapore's bid for the trans-pacific route was blocked by the federal government about an hour ago. Obviously, we all saw it coming, but still disapointing.
Mention was made ad DJ's expression of interest and said they'd be ready by 2007, however I tend to think that might be a bit of wishful thinking

 

[Guest]

Well no real supprise, but just heard Singapore's bid for the trans-pacific route was blocked by the federal government about an hour ago. Obviously, we all saw it coming, but still disapointing.
Mention was made ad DJ's expression of interest and said they'd be ready by 2007, however I tend to think that might be a bit of wishful thinking

13 hours straight in a virgin blue seat? :shock:

 

[N860CR]

A DJ economy seat doesn't differ too much from a QF economy seat though I dare say they're not going to be using the same aircraft nor offering the same product.

 

[BlacKnox]

Well no real supprise, but just heard Singapore's bid for the trans-pacific route was blocked by the federal government about an hour ago. Obviously, we all saw it coming, but still disapointing.

Yep, no here.

 

[Kiwi Flyer]

No unreal suprise either

 

[Gazza]

Still a bloody shame! :cry:

 

[BlacKnox]

Still a bloody shame! :cry:

Yep, Aust continues to lambast countries like Japan for their anti-trade policies. Yet the govt continues to protect certain industries, citing unfair practises (government subsidization) of competitors. Methinks (thanks serfty) that Aust is being slightly two faced in adopting non-tariff trade protection policies, which as usual increases prices/ fares for the end user, to the benefit of some and at the expense of most.

Hmmm, maybe it's time to cork the wine for the evening...

 

[Yada Yada]

I heard Geoff Dixon speaking about the decision on ABC's "AM" program this morning. One of his comments was that the trans-pacific route is competitive despite what SQ says. Aside from UA and in coming months AC on this route, other US airlines (and NZ) could be flying it but have pulled out.

I'm OK with the decision if indeed DJ takes the opportunity to develop a trans-pacific service, because it would add some value to their FF program and provide a decent network in conjunction with VS's destinations.

I guess the other thing to note is that SQ owns a substantial slab of VS, so it's not like they are out in the cold. Any expansion by DJ and possible future membership of *A will probably provide a flow-on benefit to SQ.

(Edited to add link to transcript of AM program.)

 

[Damien]

I heard Geoff Dixon speaking about the decision on ABC's "AM" program this morning. One of his comments was that the trans-pacific route is competitive despite what SQ says. Aside from UA and in coming months AC on this route, other US airlines (and NZ) could be flying it but have pulled out.

From a QF point of view, it is a competitive route. UA is often substantially less expensive than QF, yet how often do you see an empty seat in cattle class? It's like going to a rugby game - if they can charge a higher price and still fill the stadium, then why lower prices?

 

[NM]

From a QF point of view, it is a competitive route. UA is often substantially less expensive than QF, yet how often do you see an empty seat in cattle class? It's like going to a rugby game - if they can charge a higher price and still fill the stadium, then why lower prices?

If they keep filling the stadium, then its time to build a bigger stadium, which is the airline equivalent of adding more services on the route, and often results in ticket increases rather than reductions. Building additional stadiums provides more options and the punters can decide if they want to go to a Rugby match, a Rugby League match, a Soccer match, AFL expo, Cricket Pyjama Party, or a Tiddlywinks tournament.

SQ was not interested in competing on the route for the purpose of lowering the airfares. They want a slice of the market at the current fares. I still believe that if it such a lucrative route, why is UA the only US airline that operates it? I guess its partly historic in that only UA and NW have had the aircraft capable of non-stop LAX-SYD/MEL operations (and NW did operate to SYD a few years back), so all others would either need fleet upgrades (and no capital to do this) or one-stop services like CO used to do with the DC10/MD11 ops via AKL.

Me thinks this is way more about politics than reality.

 

[Yada Yada]

I still believe that if it such a lucrative route, why is UA the only US airline that operates it? I guess its partly historic in that only UA and NW have had the aircraft capable of non-stop LAX-SYD/MEL operations (and NW did operate to SYD a few years back), so all others would either need fleet upgrades (and no capital to do this) or one-stop services like CO used to do with the DC10/MD11 ops via AKL.

IIRC AA had a service to SYD at one time in addition to CO and NW.

 

[Damien]

SQ was not interested in competing on the route for the purpose of lowering the airfares. They want a slice of the market at the current fares.

Granted, but if the route is opened to enough competition, pax will put more thought into whose metal they fly on. For the average person (ie someone who doesn't travel like those of us on AFF), the decision will come down to just one factor - price. Once this happens, fares will need to be lowered in order to justify flying the route. The downside to this is that once fares hit the bottom end, they will slowly creep up without people noticing.

In the end, the market will decide.

Me thinks this is way more about politics than reality.

No arguments here.

 

[NM]

IIRC AA had a service to SYD at one time in addition to CO and NW.

Yes they did, but certainly not non-stop from US West coast to Australia. They have never had an aircraft capable of that distance. It was a long time ago, but they used to operate their 707s down here (and possibly 747-SP but not sure about that).

 

[Yada Yada]

Yes they did, but certainly not non-stop from US West coast to Australia. They have never had an aircraft capable of that distance. It was a long time ago, but they used to operate their 707s down here (and possibly 747-SP but not sure about that).

Yes, although didn't most flights from Australia to the USA go via HNL in those days anyway? I remember doing a number of them on QF and UA and having to get on those damned Wiki Wiki things at some ungodly hour.

 

[MIKEs]

Airfares on the trans pacific route are 38% per kilometre more than Syd-London. :shock:

Geoff Dixon spruikes that any US airline can fly the route, well as we are all aware the only other airline with the metal to fly non stop is NW but they are in no finacial position to expand.

UA have stated that they intend to revamp there international services now that are they no longer in Chapter 11, it may also give them the opportunity to apply a little more pressure to QF, only time will tell i guess.

 

[NM]

Yes, although didn't most flights from Australia to the USA go via HNL in those days anyway? I remember doing a number of them on QF and UA and having to get on those damned Wiki Wiki things at some ungodly hour.

HNL was one stopping point. Pago Pago and Nadi were also popular, especially with CO as they did well on the freight run through the south Paficic.

 

[NM]

Geoff Dixon spruikes that any US airline can fly the route, well as we are all aware the only other airline with the metal to fly non stop is NW but they are in no finacial position to expand.

CO has 777-200ER that could be used, but they don't have a suitable West Coast hub (IAH and EWR are theur main hubs). Its a similar problem for NW.

However, if SQ can operate with a hub in either location, the US airlines are welcome to participate in the game.

 

[NM]

Granted, but if the route is opened to enough competition, pax will put more thought into whose metal they fly on. For the average person (ie someone who doesn't travel like those of us on AFF), the decision will come down to just one factor - price. Once this happens, fares will need to be lowered in order to justify flying the route. The downside to this is that once fares hit the bottom end, they will slowly creep up without people noticing.

My fear is that once this happens, the service levels will fall even further in order to reduce the cost base to retain some margin. Look at how the fare reductions have affected services trans-Tasman. The only way QF can compete on some routes is to give the routes to JQ or to operate using NZ-based JetConnect crews.

Lower fares are not necessarily good all round.

 

[Yada Yada]

My fear is that once this happens, the service levels will fall even further in order to reduce the cost base to retain some margin. Look at how the fare reductions have affected services trans-Tasman. The only way QF can compete on some routes is to give the routes to JQ or to operate using NZ-based JetConnect crews.

Lower fares are not necessarily good all round.

Yes, I agree with this.

 

[Yada Yada]

BTW, I added a link to the transcript of the AM program in my earlier post in this thread.