The dominance Qantas Airways enjoys in the Australia-US non-stop market is under attack from two directions – Singapore and Sir Richard Branson.
A deal looks imminent between Australia and Singapore that would allow Singapore Airlines (SIA) to use fifth freedoms beyond Australia to the USA. Singapore has been pushing for these rights ever since the two countries signed a free trade agreement in 2003. Both countries already allow unlimited third and fourth freedoms, and Qantas already enjoys significant fifth freedoms beyond Singapore to Europe.
But until now, Australia's transport minister John Anderson has balked at open skies with Singapore, arguing that international aviation was too unstable. In the lead-up to February talks with Singapore, however, his office acknowledged that "the situation was stabilising", thus signalling a change of position.
Qantas has also eased its resistance to liberalising the Australia-Singapore bilateral. Now Qantas complains about specific fifth freedoms it lacks beyond Singapore. That plays into the hands of Singapore negotiators, who seem willing to grant almost anything Qantas wants in exchange for open skies. Because Singapore already has open skies with the USA, a similar pact with Australia would give SIA a transpacific green light. If it gains these rights, they are likely to be phased in.
The Virgin Group's Branson also seems intent on launching Australia-US flights with or without Virgin Blue. The Australian low-cost carrier has hinted that it is interested, but that could change under a pending takeover bid (see story above). Some analysts suggest that Branson's interest in the US route might wane if SIA also gains access, but Branson seems keen regardless of SIA's plans.
Source: Airline Business
