Andrzej Jeziorski/SINGAPORE
Singapore Airlines (SIA) has abandoned plans to buy a stake in Taiwan-based China Airlines (CAL), ending proposals for a strategic tie-up, including codesharing, frequent flyer links and lounge sharing.
In August 1998, SIA announced a memorandum of understanding with CAL, covering a wide-ranging alliance, with SIA due to take an initial 5-10% stake in CAL within six months. The Taiwan carrier has been in difficulties since the February 1998 crash of an Airbus A300-600R at Taipei, which killed 202.
The crash led to a drive for better training and operations procedures at the airline. SIA seconded two senior captains to CAL in September, acting as vice-president of operations and special assistant to the president, to improve safety and management procedures, and says that they will stay in Taipei for now.
Sources close to SIA say that talks ran aground over issues that included the price of the stake. SIA was interested in taking a maximum 25% share in CAL, sufficient to allow it significant management influence, but 71% shareholder China Aviation Development Foundation (CADF) insisted that it wanted to sell half of its holding to a single party.
Speaking to Flight International's sister on-line service Air Transport Intelligence, CADF maintains that it still wants to proceed with the sale, although it admits that it would be "really difficult" to proceed with talks with SIA. There are no serious talks being held with other carriers, says CADF.
Source: Flight International
