Australia Refuses Singapore's Access

[Fly]

Updated: 10:02 AM EDT
Australia Refuses Airline Access to Route

CANBERRA, Australia (AP) - The Australian government on Wednesday denied Singapore Airlines Ltd. access to the lucrative trans-Pacific route between Australia and the United States, now shared by Qantas and United.

Deputy Prime Minister John Anderson discussed with Singapore's Deputy Prime Minister Tony Tan the airline's long-standing request to service the route directly.

Australia's flagship airline, Qantas Airways Ltd., currently controls 75 percent of the market share on the route, from which it derives around 15 percent of its net profit.

Qantas, which employees over 35,000 people in Australia, shares the route only with U.S. carrier United Airlines, a unite of the Elk Grove Village, Ill.-based UAL Corp.

Seeking to defuse Australian concerns that Qantas would suffer under increased competition, Singapore Airlines executives argued that allowing the airline to fly between Australia's east coast and the U.S. West coast would increase passenger traffic.

Australian officials were not persuaded.

"The issue of trans-Pacific access has been considered at the highest levels by the Australian government, which has decided the time is not right for Singapore Airlines to be granted access to the route," said Paul Chamberlin, a spokesman for Deputy Prime Minister John Anderson.

Singapore Airlines expressed disappointment in the decision, but said it would continue to push its case to open "one of the world's most protected air routes."

"The losers from this delay will be the traveling public and the Australian tourism industry, both of which will be further denied the benefits of competition," the airline said in a statement.

Australia and free trade partner Singapore deepened bilateral aviation links in 2003, but stopped short of an open-skies agreement that would have given Singapore Airlines access to the trans-Pacific route.


06/15/05 09:59 EDT

 

[UALDC767]

Fly,

Good news for UA by default...perhaps.

If SQ were to fly this route(s) would they pull traffic from Quantas or UA?. But with Star Alliance connections then UA mght benefit from SQ flying this route since pax would be using UA instead of AA in LAX/SFO to continue their journeys in the USA.

I wonder though if the percentages were reversed and UA had the 75% market share if Austrailia would have said no then?

DC

 

[jimntx]

Does Air New Zealand no longer fly this route? My wife and I flew non-stop LAX-SYD in 1995 on ANZ.

 

[whatkindoffreshhell]

Bigger picture here -- this whole dispute centers around delivery slots for the A380.

SQ is ahead of QF to accept delivery of the A380. The Aussie gov't does not want SQ to be the first carrier to use the A380 on the SYD-LAX route so they are throwing up roadblocks for SQ.

Has JakeBrace ordered his A380s yet? Cause that is the aircraft that will dominate this route.

 

[Bigsky]

Good news as that would be a form of cabatoge. United and Quantas serve this route well and there is really no need for any more players especially a non Austrailian or non US carrier. Actually it's good news for all international legacy carriers.

 

[WorldTraveler]

Just another example of how UA has managed to survive by insulating itself from competition. Can we count how many of UA's top international markets do not allow complete market access? I'll start the list with London and China incl. Hong Kong. Anyone wanna add to the list?

Bigsky,
Cabotage is service within a country by a carrier that is not a citizen of that country. Singapore has built its route system around 5th freedom rights (serving a market between two countries not of the home carrier's flag enroute to/from the home carrier's country). NW and UA operate extensive 5th freedom services within Asia. DL and NW operate to India via Europe using 5th freedom rights.

 

[lpbrian]

Just how many carriers do you need on a route for there to be competition? Seems to me 2 carriers serving a route that are not allied are going to be "competing" for passengers. There is nothing stopping ANZ from re-entering the route, or any other Australian or US carrier.

 

[Winglet]

Screw Singapore. They're a tiny little parasitic police state that wants to horn in on other people's countries while providing nothing in return.

 

[JFK777]

The A380 theory has some credence. I think though given the small number of airplanes SIA will have at the beginning, like 2 or 3; maybe 4, Singapore - LHR is more likely. An A380 can follow the same schedule its 747-400 have to LHR now, 3 daily, with only a few hours on the ground in London. LHR will be the first since he sdhedule can maximizethe use of a limited number of planes. SIA can get the exposure in Sydney, or cause the same embarrassment to Qantas, by flying home to Singapore from Sydney as to Los Angeles. The way the shedules work to LAX from Sydney, I find it unlikely SIA would fly SYD-LAX with an A380, as one of its first routes. SIA would likely fly the monster from SFO to HKG and LAX to NRT, 2 routes its serves with 744's and has for years. A more likelt scenario is Virgin Blue or an affiliate flying as an Ausssie airline on the SYD to America route.

Though Qantas should watch out for its interests to. Qantas flies from Singapore to Europe, wouldn't be interesting if the government of Singapore said no more flying to LHR or FRA from SIN? All those Syd to SIN passengers got spoiled flying the Flagship 744's, on there way to Europe via SIN, downgraded to 767 or A330's. Talk about going from Champagne to Beer. Two fine airlines no matter what happens, flown them both, and would again, in Business of First.

 

[UALDC767]

Just another example of how UA has managed to survive by insulating itself from competition. Can we count how many of UA's top international markets do not allow complete market access? I'll start the list with London and China incl. Hong Kong. Anyone wanna add to the list?

[post="277302"][/post]​

WT,

And what is wrong with that? In fact, doesn't every airline wish it had less competition on routes/hubs it has?

You make it sound like UAL is not "playing fair" by serving restricted access destinations. They have invested lots of time and money in securing access to those destinations. But I am sure if Delta were to be flying to those places in place of UAL you would think that was ok. They could have spent the money to serve LHR and HKG, instead they choose Europe.

And as others have stated. THere is nothing preventing any other US airline from flying to Austrailia. In fact, Hawaiian does from HNL. And I believe Continential Micronesia does too. So what's stopping Delta?

DC

PS... Might as well toss in any destination in Mexico (on a route by route basis since only two US airlines can serve any one point from the same city.)

 

[WorldTraveler]

I said nothing about UA not being smart to go after protected routes. However, it does say that UA isn't quite as capable as many here paint them if their biggest profit makers are protected markets. Further, in an industry where globalization and increased market access is coming very rapidly, a business plan built on serving limited access markets is certain to fail. Perhaps the greatest proof that UA can't compete in truly competitive markets is that in 1Q05 UA recorded the highest loss per ASM in the highly competitive domestic marketplace when compared with all US carriers in all market regions (domestic, transatlantic, transpac, and Latin).

 

[peasant]

HKG isn't restrictive to US airlines- Delta used to fly LAX-HKG in the mid 90's. Open skies for 3rd/ 4th freedom flights, and plenty of slots

Fedex/ UPS/ Atlas/ Polar all have large operations in HK

 

[synchronicity]

I said nothing about UA not being smart to go after protected routes. However, it does say that UA isn't quite as capable as many here paint them if their biggest profit makers are protected markets. {(emphasis added)}

[post="277380"][/post]​

Beg pardon What?!? Of course their most profitable routes are "protected" markets. Where do you expect anyone to make the most profit, in an area where there are many competitors, or very few? Why do you think businesses constantly try to build "moats" around there markets/products to discourage competition? I mean, how many high margin businesses are there with easily substitutable products and scads of competitors?

-synchronicity

 

[Bear96]

However, it does say that UA isn't quite as capable as many here paint them if their biggest profit makers are protected markets.

[post="277380"][/post]​

Huh?

Isn't that generally true, in ANY industry, not just airlines? The more protected a market, the higher the profits (again, generally)?

I guess BA's profits are just illusory too, since they have such a lock on the huge protected market of LHR.

 

[lpbrian]

What makes US-Australia "protected"? I believe the US and Australia/New Zealand are open skies, mate.