Source: The Australian
A LANDMARK deal that removes all restrictions on flights between Singapore and Britain will benefit consumers and should be a template for other open-skies agreements, Singapore Airlines said yesterday.
The carrier welcomed the deal, which allows it to pick up passengers in Britain.
SIA is campaigning in Australia for a similar deal on trans-Pacific routes to the US. The carrier yesterday described the British breakthrough as “a real step forward for the airline industry”.
SIA spokesman Stephen Forshaw said Britain previously had one of the more restrictive regulators of air services but hadseen the “very real benefits” of opening markets to full competition.
“This is one of the most progressive air-services agreements struck across the world in years,” Mr Forshaw said.
“It will be closely watched by many other countries and should serve as a template for badly needed structural reform of the archaic air-services agreement system.
“The model of removing protection for home airlines and favouring instead an open, competitive market is something which will benefit travellers and serves as a model in breaking down protectionism.”
The British agreement, due to come into effect in March, will allow SIA to operate as many services as the Singapore-Britain market can support.
Its aircraft can also pick up passengers from London’s Heathrow Airport and fly them to the US, while British carriers will be able to do the same out of Singapore. Singaporean carriers will also be able to base their aircraft in Britain and use it as a hub to operate in other countries. Despite Singapore’s enthusiasm for the British deal, and its vow to continue pressing its case once the Australia’s federal election is over, there is little sign that either a Liberal or Labor government intends to move on the issue any time soon.
Both sides have indicated they want to give Virgin Blue’s new international carrier, V.Australia, a chance to become established before opening up the US route to all.
This is despite claims by SIA that Australia is losing $120million a year in tourism receipts by restricting competition on the route.
V.Australia’s prospects of gaining approval for its proposal to fly 10 weekly services to the US were boosted this week by the announcement that Australia and the US would begin talks on an open-skies agreement between the two countries.
The US Government had indicated it would look more favourably on Virgin’s application if it was part of wider moves towards liberalisation.
An open-skies agreement could also make Australia more attractive for US carriers and make it easier for existing carriers to increase capacity on US routes.
US carriers are returning to profitability and once more looking at international expansion, after a significant hiatus.
But whether an open-skies agreement will prove a sufficient incentive to lure them back to Australia remains to be seen.
One airline source said the existing agreement between Australia and the US was fairly liberal and said restrictions on the South Pacific were not seen as posing significant obstacles to US carriers wanting to service Australia.
Qantas and United Airlines are the only airlines flying non-stop to the US mainland, although Hawaiian Airlines flies to Honolulu and there are carriers providing one-stop options to US destinations through various hubs.
Qantas alone operates more than 40 flights a week and is planning to introduce the Airbus A380 superjumbo on the route.
The non-stop US routes are money-spinners for both airlines, although the Australian carrier says they contribute less than 15 per cent of its profits.
Just how many restrictions will be removed will be the subject of “scoping” discussions between the Transport Department and the airlines, scheduled for December.
Airlines will be seeking to ensure any agreement leads to genuine liberalisation that provides equal opportunities for both sides.
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October 5, 2007 at 7:10 am