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Old June 23rd, 2005, 11:42 PM   #241
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Australian Govt: No Need For Another Major Sydney Airport
22 June 2005

CANBERRA (Dow Jones)--Australia's Transport Minister John Anderson said Wednesday that Sydney doesn't need a second major airport, reaffirming the government's stance the existing facility can cope with a forecast rise in passenger and aircraft traffic.

"The government has formed the view that a second Sydney airport won't be needed in the foreseeable future and, consequently, the government has no plans to impose a white elephant on the aviation industry in Australia," Anderson told parliament.

Prime Minister John Howard had previously said Australia's largest city probably won't ever require a second major airport to support Kingsford Smith Airport, but promised to review the issue during 2005.

Sydney Airport Corp., the operator of Sydney airport, said in a 20-year draft master plan issued in mid-2003 that passenger traffic at Australia's major aviation gateway would triple to approximately 68.3 million by 2023-24.

The study also projected the airport would experience slower annual growth of 2.4% in aircraft movements from 2003-04 to a forecast 412,000 movements by 2023-24.

Sydney Airport Corp. Chief Executive Max Moore-Wilton said at the time that the airport had both the capacity and infrastructure planning in place to handle Sydney's projected growth in domestic and international passenger numbers and aircraft movements.
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Old June 24th, 2005, 07:30 PM   #242
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We mean business: Virgin warns Qantas
HEATH ASTON
23 June 2005
Daily Telegraph

IN case Qantas boss Geoff Dixon doesn't have enough headaches, arch-enemy

Richard Branson has warned Virgin Blue's long-awaited bid for the business traveller dollar is imminent.

Virgin Blue has been hamstrung by its failure to grab a slice of the lucrative corporate market to compensate for the market share it ceded to Qantas' cut-price start-up Jetstar.

The entry of Jetstar in 2004 prompted a succession of profit warnings from Virgin Blue this year and a subsequent takeover by its major shareholder, the Chris Corrigan-run Patrick Corp.

The strife was a clear victory for Mr Dixon and his management's aggressive tactics but the boss of the Virgin empire, and still the biggest private investor in Virgin Blue, said he wasn't about to step back from a fight.

Drawing on Mr Branson's success at Virgin Atlantic, Brett Godfrey's team at Virgin Blue has called in the billionaire to help formulate a frequent flyer program.

"No specific dates but it's coming and Qantas should be worried," Mr Branson told The Daily Telegraph from London.

"At the moment there's no reason for anybody not to fly Virgin Blue except for frequent flyers. Once we've come in and knocked the socks out of that then I think Virgin Blue will literally fly."

Virgin Atlantic has attacked Qantas on international routes by launching a "Flying Club" for Australian customers.

Virgin Atlantic has also struck a code-share deal with Virgin Blue to funnel more international passengers on to Virgin's domestic services.

On a different front, Qantas' so-far successful campaign to keep Singapore Airlines from competing on Australia-US routes was dealt a blow by Prime Minister John Howard yesterday.

Mr Howard said there was no assurance the latest six-month extension to the current policy shut the door permanently on Singapore Airlines' requests.

Mr Dixon, responding to media reports that Qantas was close to having to issue a profit warning, told the ASX the airline was on track to meet previous guidance -- a profit of around $730 million.

Meanwhile, Mr Branson, tipped to bail out of Virgin Blue during the Patrick takeover, again renewed his commitment to the airline.

"Virgin Blue is still a great company and we are planning to stick with it for the long term," he said.

With oil prices nearing $US60 a barrel both airlines' stocks have been under pressure in 2005. Yesterday, Qantas put on 1c to $3.31 while Virgin Blue hovered at an all-time low, down 1.5c to $1.66.
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Old June 24th, 2005, 07:33 PM   #243
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Flying kangaroo still on target to meet forecast
SCOTT ROCHFORT
23 June 2005
The Age

QANTAS has issued a statement saying it will meet profit forecasts for this financial year, moving to quell speculation it could be preparing to issue a downgrade as a result of rising oil prices, softening demand and accounting adjustments.

In a response to talk in the market that the airline could issue a profit downgrade or major write-down as early as tomorrow, Qantas said it "would meet the current market expectations for the 2004-05 financial year".

The airline said it would make an announcement tomorrow to detail accounting changes to be made to adopt Australian equivalents to the International Financial Reporting Standards. -- SCOTT ROCHFORT
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Old June 25th, 2005, 06:11 AM   #244
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June 25, 2005
Qantas says new rules will raise gearing

SYDNEY - AUSTRALIA'S Qantas Airways said new accounting rules would lower its retained earnings by A$826 million (S$1.08 billion), increasing its debt-to-equity ratio.

Australian companies must adopt Australian equivalents of International Financial Reporting Standards from next month.

Qantas said yesterday that the new rules would not affect its cash flows, credit ratings, dividend policy or management. It did not expect any significant impact on future earnings.

The changes come as the Australian government considers dropping a restriction on foreign airline ownership of Qantas, now limited to 25 per cent for a single airline and 35 per cent for a group of airlines.

The Australian newspaper said yesterday that Treasurer Peter Costello was also in favour of allowing rivals to compete with Qantas on lucrative routes between Australia and the United States.

The government has deferred a decision on a bid by Singapore Airlines to gain access to the Sydney-Los Angeles route.

Qantas has repeatedly asked for increased foreign ownership to allow it greater access to foreign capital.

The main adjustments to Qantas' earnings from the accounting changes came from the deferred recognition of its loyalty programme revenue, a funding deficit for part of its pension plan and reclassification of some aircraft leases, Qantas chief financial officer Peter Gregg said in a statement to the Australian Stock Exchange. -- REUTERS

Copyright 2005 Singapore Press Holdings. All rights reserved.
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Old June 26th, 2005, 06:09 PM   #245
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Australian court quashes DVT case against airlines

SYDNEY, June 23 (AFP) - The Australian High Court on Thursday rejected an airline passenger's bid to sue Qantas and British Airways for allegedly causing deep vein thrombosis (DVT) during long-haul flights.

The High Court, Australia's top court, ruled a civil lawsuit by Sydney man Brian Povey should be struck out, ending a case that was seen as a test case for hundreds of similar cases of DVT, also known as economy-class syndrome.

Povey filed the lawsuit after he suffered a stroke that left him with permanent disabilities shortly after travelling from Sydney to London on a Qantas flight in February 2000 and returning with British Airways five days later.

The case had previously been thrown out of the Victoria state court system and Povey went to the High Court on appeal.

The court ruled the flight conditions which Povey said caused DVT could not be legally defined as an "accident" which the airlines were liable for.

DVT, a potentially fatal condition in which blood clots form during long periods of inactivity in cramped accommodation such as aircraft seats, has afflicted thousands of airline passengers over many years.

Qantas welcomed the court's decision.

"This is a positive outcome for the airline industry," a spokeswoman told AFP.
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Old June 27th, 2005, 02:37 AM   #246
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Qantas Considers Future Carrier Alliance
26 June 2005

SYDNEY, Australia (AP) - Australian flag carrier Qantas likely will form some kind of alliance with another airline in the future, Chief Executive Officer Geoff Dixon said Sunday.

"I think that we will be in some association with another carrier," he told Australian television's Nine Network. "I think that will become necessary."

Dixon declined to identify a likely partner and said the Qantas brand name would remain even if it ties up with another carrier.

"I've always said I believe Singapore Airlines are a wonderful carrier, have a tremendous brand, tremendous track record," Dixon said, responding to recent speculation about a possible merger between Qantas Airways Ltd. and its Singapore rival.

"Yes, they would be a lovely partner but so would British Airways, so would Cathay Pacific, so would a lot of carriers out there," he added. "So would Air New Zealand, which was literally taken away from us."

Qantas and Air New Zealand's proposed alliance was vetoed in 2003 by New Zealand's competition watchdog, which said it would be anticompetitive.

Dixon said he supports a relaxing of a foreign ownership cap in Qantas, which currently allows single foreign airlines to own no more than 25 percent of its stock and limits overall foreign ownership to 49 percent of the carrier.

"We would like to be like every other company in Australia -- all the restrictions moved," he said.

Dixon also said Qantas has no immediate plans to lift its fuel surcharge as world oil prices surge.

"We have not made a decision in the pipeline for that at all," he said. "It's tough, at $60 a barrel, but we have no immediate plans."

Qantas currently slaps a 20 Australian dollar ($15.39; euro12.74) fuel levy on all domestic tickets and A$60 ($46.17; euro38.21) for international routes.

"We are not confident that oil prices will go down dramatically in the next two or three years so the way we structure our business going forward has got to take into account that we are going to have high oil prices for quite a long time," he said.

Dixon said Qantas will wait three or four months to see where the oil price is headed before reviewing the possibility of lifting its fuel surcharge.

"But look, if things got very, very tough and it became a competitive issue obviously we will have to look at it," he said.
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Old June 27th, 2005, 06:47 AM   #247
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Qantas writes off $826m on accounting change but profits on course
Scott Rochfort
25 June 2005
The Sydney Morning Herald

Accounting adjustments have forced Qantas to take an $826 million hit on its balance sheet, raising concerns the rising oil price will not be the only negative weighing on its share price in coming months.

Qantas said on Friday that its adoption of International Financial Reporting Standards from July 1 would result in "a reduction in retained earnings of $826 million and therefore an increase in gearing ratios".

After rejecting speculation during the week that the airline was preparing a profit downgrade, Qantas's chief financial officer, Peter Gregg, stressed the adjustment would not affect the airline's cash flows, dividend policy or profitability.

"What we say is the major changes won't have any material impact on profitability going forward," he said.

Mr Gregg said the accounting changes would raise Qantas's debt to equity ratio from 48 per cent to 54 per cent. Mr Gregg said he expected the move would cut the airline's net tangible asset value from about $3.20 to $2.80 a share. However, with oil prices hovering around $US60 a barrel and passenger demand softening both internationally and domestically, the reduction in Qantas's book value - by 13 per cent - because of the adjustment is expected to weigh on the airline's share price.

"Book value is something people look at in the airline industry as a rule of thumb," said ABN Amro Asset Management's George Clapham.

A Morgan Stanley research note said the adoption of the standards would have "a marginal impact on Qantas's share price, as it reduces book value and increases gearing, but has no impact on future earnings and cash flow". The broker said the write-down would reduce the airline's book value by 43c a share to $2.94.

The biggest component was a $749 million write-down on the airline's frequent-flyer scheme. Under the new rules, frequent-flyer revenue will be "deferred and recognised when points are redeemed".

When asked why the frequent-flyer write-down was so large compared with other airlines that had made similar adjustments, Mr Gregg said it was because Qantas had a larger scheme. Cathay Pacific only took a $HK250 million ($41 million) hit on its retained profits from the move.

"We probably have a far more successful frequent-flyer program than Cathay," Mr Gregg said.

Qantas said the adjustments included the "recognition of a funding deficit for the defined benefit portion of the Qantas Superannuation Plan and the reclassification of some non-cancellable aircraft operating leases as finance leases".

It is understood Mr Gregg called an analysts briefing on Friday in response to a research note by Macquarie Equities that foreshadowed the write-down.

Qantas shares fell 1c to $3.32 as the market largely shrugged off the adjustment, with the airline's dividend yield seen as a buffer.

In its intraday report, Goldman Sachs JBWere said that while dividend yield might provide some support, the challenging 2005-06 earnings outlook "suggests [a] downside share price risk".
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Old June 29th, 2005, 04:02 PM   #248
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Wednesday June 29, 4:52 PM
Qantas to resume flights from Australia to Beijing

Hoping to cash in on China's booming economy and demand for travel to the host of the 2008 summer Olympics, Australia's Qantas Airways will begin flying between Sydney and Beijing in January after a six year hiatus.

Initially the airline will offer three flights a week to Beijing, but this will be bumped up to daily within two years, Qantas Executive General Manager John Borghetti said Wednesday.

Qantas will also increase the frequency of its Sydney to Shanghai service from the current three flights a week to four in November, increasing to daily within two years, Borghetti said.

"Travel between China and Australia has increased more than 40 percent in the past three years and is expected to grow a further 20 percent in the next 12 months," Borghetti said in a statement.

The increase in the number of travelers between the two countries was a result of "the growing trade relations between Australia and China and increasing demand for leisure travel in both directions," he said.

Qantas Chief Executive Geoff Dixon said last week he was seeking rights to fly to the United Kingdom via China, India and Hong Kong.

Dixon said he understood bilateral talks between Australia and Britain last week had been "difficult."
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Old June 29th, 2005, 04:05 PM   #249
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Wednesday June 29, 2:09 PM
Sydney Airport Hopeful Of Charges Decision July 1

MELBOURNE (Dow Jones)--Australia's Sydney Airport, the nation's busiest, said Wednesday it may settle a long-running dispute with airlines over airport charges by the end of the week.

Sydney Airport and the Board of Airline Representatives in Australia, which represents 45 airlines, are trying to set landing and terminal charges for the next five years.

Talks have been difficult with Sydney Airport accusing airlines of failing to negotiate in good faith and airlines saying the airport is being too greedy, according to a report Wednesday in the Australian Financial Review.

"There are still negotiations underway," a Sydney Airport spokeswoman said. "We're still hopeful of a July 1 outcome."

Separate negotiations over how airport and runway upgrades for the Airbus A380 super-jumbo will be funded are also ongoing, the spokeswoman said.

Singapore Airlines (S55.SG), which has ordered 10 of the aircraft, will be the first to fly the A380 to Australia late next year. Qantas Airlines Ltd. (QAN.AU) will take delivery of the first of the 12 A380s it has ordered in April 2007.

Macquarie Airports (MAP.AU) has a 55.5% stake in Sydney Airport.
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Old June 30th, 2005, 06:48 AM   #250
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AUSTRALIA PRESS: Airlines Hit Out At Sydney Airport
28 June 2005

SYDNEY (Dow Jones)--Major airlines have sent a strongly worded letter to Sydney Airport Chairman Max Moore-Wilton accusing the airport of excessive charges that would benefit its own main shareholders such as Macquarie Bank Ltd. (MBL.AU), the Australian Financial Review reports Wednesday.

Citing a copy of the letter from the Board of Airline Representatives sent in late May, the report says the letter shows airlines and the airport are still a long way off reaching agreements on landing and terminal charges.

"The airlines believe that the (Sydney Airport) offer is totally unacceptable, particularly as it involves the transfer over time of millions of dollars from airline passengers and shareholders to (Sydney Airport) shareholders, with no associated economic benefit," it said.

The report says Moore-Wilton responded by accusing the airlines of "pursuing a strategy of delay and deregulation of airports including Sydney Airport in lieu of negotiating in good faith".

Newspaper Web site: http://www.afr.com.au
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Old July 1st, 2005, 03:36 AM   #251
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Qantas: Who does it want to partner with?

I've been seeing articles that Qantas Airlines of Australia is interested in some sort of hook-up with another major airline. I've seen Singapore, Cathay and a couple others mentioned. Why would Qantas be interested in some type of connection, and who do you think it would be with?
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Old July 1st, 2005, 04:54 PM   #252
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Isn't Qantas already part of OneWorld Alliance with British Airways, Cathay Pacific, American Airlines, etc.?
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Old July 1st, 2005, 06:43 PM   #253
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I believe so, but the CEO of Qantas was recent talking about something closer to a merger with another major airline.
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Old July 1st, 2005, 07:27 PM   #254
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There were talk last year about Air NZ, but i think that was on the merger of routes or somthing, i dont pay much attention to the news.
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Old July 1st, 2005, 09:13 PM   #255
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I think it'd be more feasible to join up with someone from the oneworld alliance. Maybe Cathay or BA.
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Old July 2nd, 2005, 03:58 AM   #256
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The CEO of Qantas mentioned Cathay, BA, Singapore and another major airline, but he seemed to be talking merger language. I know that Singapore would like to fly the Sydney-Los Angeles route which makes Qantas a lot of money, but the Australian government wants to keep it to themselves and United Airlines.

They must really move a lot of passengers on that route because I've seen aerials of LAX and there are sometimes three or four Qantas 747s parked on a side apron waiting for their flights back to Oz.
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Old July 2nd, 2005, 11:21 AM   #257
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He mentioned Air NZ too, and that it was thwarted by the Australian government. I guess Singapore would be possible too. Star Alliance is crowded, and SQ's apparently being courted by other alliances. Joining up with Qantas would take care of two stones. I think joining up with BA could get an anti-competitive challenge like with Air NZ.
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Old July 2nd, 2005, 06:02 PM   #258
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I highly doubt there will be any merger between Qantas and SIA. The synergy is just not great enough to justify such an action. As much as Qantas needs a partner, SIA does not. Its the second biggest airline in the world (after Southwest) and consistantly makes a lot of profit.
BA used to own 25% of Qantas a few years ago but they've since sold a lot of it.
The planned Air NZ merger was rejected on grounds of being anti competitive. I dont think that sentiment will have changed much in the past year.
I have no idea whether Cathay will want to merge with Qantas.
However, in light of all of this, mergers usually surprise the public in regards to the bodies involved (AOL Time Warner, who would've thought?).
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Old July 3rd, 2005, 01:57 PM   #259
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Makes sense to have a few strong low-cost carriers in the region (like North America and Europe) than a dozen fledgling LCC.
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Sunday July 3, 12:43 PM
Analysts sceptical of Qantas-SIA merger but back discount wing link

SYDNEY (AFP) - Aviation analysts have dismissed suggestions from top officials in Canberra and Singapore that Qantas and Singapore Airlines will merge, but say the two carriers' discount offshoots would benefit from an alliance.
Australia's Trade Minister Mark Vaile first floated the idea of a merger between the airlines last month. Since then, both Prime Minister John Howard and Singapore Transport Minister Yeo Chow Tong have canvassed the prospect.

Qantas chief executive Geoff Dixon also said he believed his airline would merge within the next decade, nominating SIA, British Airways, Cathay Pacific and Air New Zealand as potential partners.

But Commsec aviation analyst Matt Crowe said a full-blown merger was unlikely, although he believed the airlines could combine some non-competitive functions such as catering and ground services.

"There's no compelling reason for a merger, these are the two most profitable national airlines in the world," he told AFP. "They're also major rivals in the same market, so it's difficult to see how they could avoid running foul of competition regulators."

Crowe said another major obstacle was the special place the airlines held in the psyches of both countries, saying while a merger may appear attractive to politicians, it would prove extremely unpopular with the public.

Analysts said while a merger of the full service airlines made little sense, their budget offshoots were prime candidates for consolidation.

Qantas' Jetstar Asia began operating from Singapore last December but the Centre for Pacific Aviation (CPA) said it was struggling because it had failed to secure access to a number of countries in the region.

Jetstar Asia announced it was holding alliance talks with rival Valuair last week as a way of dealing with rising fuel prices and carving out a niche in the region's crowded low cost airline market.

CPA senior consultant Ian Thomas said Jetstar Asia could also consider merging with SIA's Tiger Airways, creating a large discount airline to take on the market's dominant budget carrier, Malaysia's AirAsia.

"The low cost carrier market in Southeast Asia is at a very early stage, it's in a state of flux as everyone tries to establish themselves," he told AFP.

"The alliances formed now are going to be crucial in determining who survives long-term."

Thomas pointed out that SIA and Jetstar Asia already had a common shareholder in Temasek Holdings, which owns the majority of SIA shares and a 19 percent stake in Jetstar Asia, which is 49-percent owned by Qantas.

Crowe said Jetstar Asia had failed to impress since its launch.

"It's been a bit of a flop really," he said. "A merger from Jetstar Asia's point of view would be very appealing, it would solve their access problems and a link-up with Tiger in particular would provide a partner for an aggressive push into China, which has huge potential."

Crowe said he was puzzled at the stream of SIA-Qantas merger talk from Australian and Singaporean politicians. He suggested it was a way of publicly glossing over any potential rift from Canberra's decision last month not to allow SIA access to the lucrative Australia-US route, despite intense lobbying by Singapore.

SIA's Sydney-based spokeswoman Kate Pratley said the merger proposal had not originated from the airline, which was still concentrating on gaining access to the Australia-US route.

"A possible merger with Qantas is something that hasn't come up with us as an issue for a number of years," she told AFP. "We're very much focussed on the trans-Pacific route."

A Qantas spokeswoman said no merger talks were underway.

Any merger would require Canberra to scrap a 49 percent cap on foreign ownership of Qantas, a measure the government is considering as part of a wider transport review.

A spokeswoman for Transport Minister John Anderson said a merger had not been formally canvassed between the two governments. She refused to say whether the issue was informally discussed when Singapore Transport Minister Yeo Chow Tong met Anderson in Australia last month.
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Old July 3rd, 2005, 02:00 PM   #260
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Makes sense to have a few strong low-cost carriers in the region (like North America and Europe) than a dozen fledgling LCC.
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Sunday July 3, 12:43 PM
Analysts sceptical of Qantas-SIA merger but back discount wing link

SYDNEY (AFP) - Aviation analysts have dismissed suggestions from top officials in Canberra and Singapore that Qantas and Singapore Airlines will merge, but say the two carriers' discount offshoots would benefit from an alliance.
Australia's Trade Minister Mark Vaile first floated the idea of a merger between the airlines last month. Since then, both Prime Minister John Howard and Singapore Transport Minister Yeo Chow Tong have canvassed the prospect.

Qantas chief executive Geoff Dixon also said he believed his airline would merge within the next decade, nominating SIA, British Airways, Cathay Pacific and Air New Zealand as potential partners.

But Commsec aviation analyst Matt Crowe said a full-blown merger was unlikely, although he believed the airlines could combine some non-competitive functions such as catering and ground services.

"There's no compelling reason for a merger, these are the two most profitable national airlines in the world," he told AFP. "They're also major rivals in the same market, so it's difficult to see how they could avoid running foul of competition regulators."

Crowe said another major obstacle was the special place the airlines held in the psyches of both countries, saying while a merger may appear attractive to politicians, it would prove extremely unpopular with the public.

Analysts said while a merger of the full service airlines made little sense, their budget offshoots were prime candidates for consolidation.

Qantas' Jetstar Asia began operating from Singapore last December but the Centre for Pacific Aviation (CPA) said it was struggling because it had failed to secure access to a number of countries in the region.

Jetstar Asia announced it was holding alliance talks with rival Valuair last week as a way of dealing with rising fuel prices and carving out a niche in the region's crowded low cost airline market.

CPA senior consultant Ian Thomas said Jetstar Asia could also consider merging with SIA's Tiger Airways, creating a large discount airline to take on the market's dominant budget carrier, Malaysia's AirAsia.

"The low cost carrier market in Southeast Asia is at a very early stage, it's in a state of flux as everyone tries to establish themselves," he told AFP.

"The alliances formed now are going to be crucial in determining who survives long-term."

Thomas pointed out that SIA and Jetstar Asia already had a common shareholder in Temasek Holdings, which owns the majority of SIA shares and a 19 percent stake in Jetstar Asia, which is 49-percent owned by Qantas.

Crowe said Jetstar Asia had failed to impress since its launch.

"It's been a bit of a flop really," he said. "A merger from Jetstar Asia's point of view would be very appealing, it would solve their access problems and a link-up with Tiger in particular would provide a partner for an aggressive push into China, which has huge potential."

Crowe said he was puzzled at the stream of SIA-Qantas merger talk from Australian and Singaporean politicians. He suggested it was a way of publicly glossing over any potential rift from Canberra's decision last month not to allow SIA access to the lucrative Australia-US route, despite intense lobbying by Singapore.

SIA's Sydney-based spokeswoman Kate Pratley said the merger proposal had not originated from the airline, which was still concentrating on gaining access to the Australia-US route.

"A possible merger with Qantas is something that hasn't come up with us as an issue for a number of years," she told AFP. "We're very much focussed on the trans-Pacific route."

A Qantas spokeswoman said no merger talks were underway.

Any merger would require Canberra to scrap a 49 percent cap on foreign ownership of Qantas, a measure the government is considering as part of a wider transport review.

A spokeswoman for Transport Minister John Anderson said a merger had not been formally canvassed between the two governments. She refused to say whether the issue was informally discussed when Singapore Transport Minister Yeo Chow Tong met Anderson in Australia last month.
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