Qantas Focus Drifts North
Feb. 14, 2007
Centre for Asia Pacific Aviation notes that less than a week after Tiger Airways announced plans to shake-up the Australian domestic market, Qantas has scored a regulatory win in Singapore.
The Competition Commission of Singapore (CCS) has issued a draft decision to approve an effective merger with its 45%-owned subsidiary Orangestar - the holding company for the Jetstar Asia and Valuair units. According to CCS, the agreement between Qantas and Orangestar would bring about operational improvements and cost savings - benefiting Singapore consumers. The Australian Competition & Consumer Commission (ACCC) gave a green light to the agreement six months ago. The deal should help stem the losses of the Singapore operation.
The CCS has also waved through the Qantas-British Airways Restated Joint Services Agreement for similar reasons mentioned above and the fact that interested parties had not raised any 'substantive' competition concerns during the assessment process.
Meanwhile, Qantas has agreed to formally terminate its Strategic Alliance, Tasman Network and Convert Redeemable Convertible Notes agreements with Air New Zealand, following the ACCC's rejection late last year of the carrier's plans.
"These events, coupled with Qantas' recent disclosure of its interest in investing in Vietnam-based LCC, Pacific Airlines, demonstrates how the carriers' future is linked to its direct investments in Asia," stated the Centre's Executive Chairman, Peter Harbison.
"It's a riskier strategy than closer-to-home alliances, and Qantas will need committed investors to back it up," concluded Mr Harbison.