The Australian
Singapore Airlines yesterday vowed to resume its campaign to fly the lucrative Pacific Route to the US after the federal election campaign.
“We aren’t giving up,” the airline’s public relations chief Steven Forshaw said from Singapore yesterday.
“We know the Government has made a decision and there’s an election coming up.
“But we intend to keep pressing the Government, whichever persuasion it may be, now and in the future.”
Mr Forshaw said a study commissioned by the airline showed Australia was losing at least $120 million a year in tourism receipts by refusing to allow new operators such as Singapore Airlines on to the route.
The comments from SIA come as Qantas is preparing to step up flights to the US from next week from five services a week to a daily service.
The two extra flights a week from Sydney to New York via Los Angeles are aimed primarily at the business market.
They come after complaints by travellers over the tight capacity on the trans-Pacific route — an issue which Singapore Airlines has been using in Canberra as part of its pitch to open up the route.
Qantas currently carries about 75 per cent of passengers on the direct flights between Australia and the US.
And the airline is set to record a substantial increase in annual profit next week, on the back of a booming world aviation market and a limited supply of new aircraft.
Capacity levels on the Pacific route are averaging more than 80 per cent, with the Australia-US market getting a boost recently from the strong Australian dollar.
Shaw Stockbroking analyst Brent Mitchell said yesterday he was expecting a 55 per cent jump in net profit to $745 million.
Earnings from the US route are expected to be an important driver of the profit hike.
Qantas chief executive Geoff Dixon last week acknowledged that the Pacific was one of the airline’s most profitable routes, but rejected suggestions that it made up as much as 30 per cent of the Qantas profit.
He said the Australia/US route contributed less than 15 per cent of the airline’s profits.
But he vowed to “aggressively defend” Qantas’s position on the route against increasing competition.
“We are about to face a new round of competitive challenges and we will be vigorous combatants,” he said.
Qantas will install its new 550seat Airbus A380 aircraft on the Pacific route as soon as it receives its first deliveries, in the fourth quarter of next year.
Virgin Blue is set to begin flights to the US in November next year under the name of V Australia.
The airline received formal approval from Australia’s International Air Services Commission last month to operate return services between Australia and the US, starting in November next year.
A Virgin Blue spokesman said yesterday that the airline was still in the process of obtaining regulatory approvals from other bodies, including US authorities.
But he said the airline was aiming to start on the US route in late 2008.
Announcing the approval, Virgin Blue chief executive Brett Godfrey said the arrival of VAustralia on the Pacific route would bring “competitive fares and a new style of service to the trans-Pacific route”. V Australia will begin services to the west coast of the US with new B777-300ER aircraft.
Qantas executive general manager John Borghetti said the increased frequency of service between Australia and the US would be particularly important for business travellers.
“Offering them a daily flight to New York will provide the flexibility they need to plan their schedules,” he said.
Qantas has increased its New York services twice over the past 18 months.
United Airlines operates daily nonstop services from Sydney to both Los Angeles and San Francisco with 747-400 aircraft, and from Melbourne via Sydney.
An airline spokesman said yesterday that there were no immediate plans to expand its services to Australia, except for the additional three flights a week normally operated during the summer period.
But he said the focus would be on “upgrading the customer experience” in the premium segment.
United is investing hundreds of millions of dollars in upgrading its First and Business class cabins with fully lie flat bed seats on its overseas flights, including to Australia.
The spokesman said the program would be completed by the end of 2009.
“At the completion of the roll-out our customers will be able to experience the new flat bed products on all our flights to and from Australia,” he said.
By: steve rowell - 14th August 2007 at 05:25
The Australian
Giant US carrier United Airlines is urging US authorities to use Australia’s new international airline, V Australia, to pressure the federal Government for an open-skies agreement across the Pacific.
Virgin Blue chief executive Brett Godfrey revealed yesterday that United was opposing a submission by Virgin to the US Department of Transport seeking 10 flights weekly.
United and Qantas are currently the only airlines to fly directly to the continental US and the entry of V Australia would break up the duopoly.
Virgin needs approval from US and Australian authorities to fly more than four services per week and already has permission from Canberra for the additional flights.
It has yet to get US Transportation Department approval, however, and there are worries the application could become a political bargaining chip.
Speaking at the unveiling of V Australia’s new name and livery, Mr Godfrey said United had opposed Virgin’s submission on the grounds that the US authorities should use the new airline to press the Australian Government to negotiate an open-skies agreement.
United tried a similar tactic when Jetstar International applied to fly to Honolulu. “I think they’re fairly clear in their submission that they’re not so concerned about us coming on the route,” Mr Godfrey said.
“It’s the fact that they see this as another opportunity for their government to pressure our government on open skies, at least on the trans-Pacific route.”
Mr Godfrey said Virgin had no problems with an open-skies agreement that allowed carriers on both sides of the Pacific unlimited access to each other’s markets.
Virgin’s new airline would serve the public interest, he said.
“It’s a public interest issue, which is why our Government has supported it, and I would be disappointed if the Americans didn’t also see it that way,” he said. Officials chose the V Australia moniker after reviewing almost 6000 entries in a nationwide competition.
The Australian carrier is prevented from using the Virgin brand on international services by an agreement between Virgin Group and Singapore Airlines, which owns 49 per cent of Virgin Atlantic.
Mr Godfrey also announced that the first plane would be called Didgeree Blue and unveiled a red and white livery with the Southern Cross emblazoned across the tail.
If its US application succeeds, V Australia expects to start flying late next year and to capture about 12 per cent of the direct US market using Boeing 777-300ER aircraft.
It expects startup costs to be about $70 million over and above lines of credit needed to secure aircraft and believes it will lose money in the first 18 months.
Mr Godfrey said the airline would probably link up in the US with Virgin Atlantic and Virgin America.
The new airline’s launch was welcomed yesterday by politicians and tourism bodies, which said it would provide a much-needed boost on the route.
Some 456,000 Americans visited Australia last year and the market is worth about $2 billion.
Tourism operators have complained that tight availability of seats on the route means business is being turned away.
“V Australia will deliver a shot in the arm to aviation capacity on the Pacific route,” Tourism Minister Fran Bailey said.
“Far too many Americans have missed out on a holiday to Australia due to a lack of capacity on the Pacific route.”
Tourism lobby group TTF Australia said V Australia would bring more tourists and create more jobs.
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August 11, 2007 at 9:24 am