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RedQ firms as name for Qantas's new premium airline in Asia

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Qantas is said to be planning to set up a premium airline in Malaysia to widen its network in Asia and service the region's fast-growing corporate travel market.

 

The airline yesterday rebuffed speculation that it had applied for an air operator's certificate in Malaysia, but said ''all options are on the table'' as part of a review of its international operations.

 

A team led by a senior executive, Lesley Grant, has been reviewing the airline's loss-making international operations since January, including looking at whether to revamp inflight products, open new routes or ditch underperforming services.

 

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''At this stage we don't have any options to rule in or out,'' Qantas's government relations boss, Olivia Wirth, said. ''We are going to be investigating all options but [a Malaysia-based airline] is purely speculation.''

 

The long-haul pilots' union said it believed Qantas was looking to set up a premium airline in Malaysia which could connect to a hub in China's business capital, Shanghai, and provide onwards flights to Europe. It would initially fly Airbus A320 aircraft but would later need long-haul planes, it said.

 

The other hub considered a possibility for a Qantas premium airline in Asia is Singapore, where the airline’s low-cost offshoot, Jetstar Asia, is based. The budget airline, in which Qantas has a 49 per cent stake, already covers international routes from Australia and Singapore to Japan.

 

The union is in a stand-off with Qantas over an employment agreement and has warned the airline that it is on the verge of seeking protected industrial action.

 

Malaysia has frequently been on the radar of Qantas in the past. Under previous management, the operator came close to merging with the government-owned Malaysia Airlines three years ago but the talks faltered over the likely ratio of shareholdings in any tie up.

 

Jetstar has also been stepping up its search for airline partners in Asia over the last year, including Indonesia, the Philippines and Japan.

 

It has been in talks with Japan Airlines about setting up a joint venture to fly domestic routes, although

 

those efforts have been hindered by the country's recent earthquake and tsunami.

 

The speculation about the push into Asia comes as Qantas seeks to form a closer alliance with American Airlines on flights between Australasia and the US.

 

Qantas's application to the Australian Competition and Consumer Commission for approval of a joint business agreement with American Airlines comes a day after Virgin Australia won tentative approval from the US regulator for a joint venture with Delta Air Lines on the trans-Pacific route.

 

Modelled along similar lines to its close ties with British Airways on the Australia-US route, the latest application by Qantas for an alliance is aimed at offering better flight schedules and frequencies, and jointly planning and managing trans-Pacific services.

 

Qantas begins services between Australia and Dallas next week, replacing flights to San Francisco which have been axed in favour of American Airline's main hub in the United States.

 

Shares in Qantas fell for the third consecutive day, down 2 cents to $2.12, despite its 1600 licensed aircraft engineers calling off a one-hour stoppage planned for today.

 

The engineers still intend to take industrial action next Monday and Tuesday, which will include work stoppages.

 

Ms Wirth said the airline would not be announcing the details of the review of its international operations until the end of the year.

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From the article, I believe they want to set up a network in KUL and fly to China, India and other Asia routes. Just like Jetstar Asia in SIN.

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Also, from this article, QF seems quite eager to re-instate KUL in their network. As Australia-Malaysia relationship has improved tremendously in recent years, they may start flying to KUL soon, albeit through JQ.

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Remember a few years back when Jetstar did KUL-SYD. The airline mentioned that they were studying other possible routes to KUL which included Perth, Brisbane etc;. Maybe QF could do the KUL-SYD route and let JQ take over the rest once they have the proper equipment to do so.

 

And on a side note, and a little off topic, I think Air New Zealand may want to consider KUL too. We'll see how it all turns out.

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KUALA LUMPUR, May 13 (Bernama) -- Transport Minister Datuk Seri Kong Cho Ha said Australian national carrier Qantas has not applied for an air operator's certificate to set up a premium airline in Malaysia.

 

"We have not received any application. I don't know whether they will do so in the future but at the moment, we've not received any such application," he told Bernama here Friday.

 

The Sydney Morning Herald today reported that Qantas was looking at setting up a premium airline in Malaysia and cited speculative reports that the airline had applied for an air operator's certificate in Malaysia.

 

However, in a separate report, the Australian Financial Review said Qantas was looking at establishing a full-service subsidiary in Singapore where up to 20 aircraft could be based.

 

The newspaper said Qantas may use the Singapore unit to build up its network in Europe, the report said.

 

Qantas has denied it had applied for an air operator's certificate in Malaysia but said a range of options was on the table to try and recover its dwindling international market share.

 

"A project team has been established to look at Qantas' international product and service, possible new routes and ways to reinvigorate our offering," an airline spokesman said today.

Why so much excitement when Qantas has not even made any decision - it is merely studying the possibility now. With oil prices sky high at the moment, any new airline would struggle. Even SQ is struggling - so if there is to be a new airline, we will probably only see it when the economy improves.

 

A premium airline would do better if it is based in SIN as KUL is more suitable for lower cost airlines.

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Remember a few years back when Jetstar did KUL-SYD. The airline mentioned that they were studying other possible routes to KUL which included Perth, Brisbane etc;. Maybe QF could do the KUL-SYD route and let JQ take over the rest once they have the proper equipment to do so.

 

Why does JQ have to take the other Australian routes and QF provides full service to SYD pax? The MEL market and to a lesser extent PER business market has more interests in Malaysia and offers more significant yield compared to SYD, hence the significant figures from pax ex MEL & PER to KUL in recent months. QF should spread out it's operations, while it has been expanding SYD internationally, it has drastically scaled down operations in other Asutralian airports, handing over markets to foreign carriers on a silver platter.

 

Although JQ didn't even last very long on the route I can see it work on routes such as DRW-KUL using A320/21.

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A premium airline would do better if it is based in SIN as KUL is more suitable for lower cost airlines.

 

And that is why MH struggles for good yields compared to SQ and CX and also why AK/D7 has a much easier time getting passengers.

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A premium airline would do better if it is based in SIN as KUL is more suitable for lower cost airlines.

Spot on !

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Qantas To Focus On Asia To Return To Profits

June 22, 2011 17:45 PM

MELBOURNE, June 22 (Bernama) -- Qantas has foreshadowed "tough decisions" and a greater focus on Asia to turn around the airline's loss-making international business.

 

Qantas Chief Executive Alan Joyce said the airline would announce the results of a review of its international business on August 24, the day it would announce its full year earnings.

 

Qantas International is expected to make a loss of A$200 million before tax this financial year.

 

The new strategy would focus more on offshore alliances, increasing the airline's focus on Asia and axing non-performing and unsustainable parts of the business, Joyce said in an address at the Press Club in Canberra.

 

"We will be taking these relations to the next level, including the joint venture level.

 

"As a nation we used to fly via Asia, now we fly to Asia, and the future will be about travel both to and within Asia," Joyce was quoted as saying by the Australian Associated Press

 

He said the company would "cast a ruthless and honest eye" over the international business.

 

Qantas International faced tough competition from airlines operating from a lower cost base, many of which were government-owned or supported airlines that "push capacity into the marketplace without an expectation of commercial return," he said.

 

Despite poor financial performance, Joyce said the Qantas International network was strong enough to survive any threat from Virgin Australia's recently announced tie-up with Singapore Airlines.

 

Qantas International codeshares on about 6,700 flights a week to 134 destinations.

 

http://aviation.bernama.com/news.php?id=595973&lang=en&cat=b

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PREMIUM AIRLINE TO SOLVE ASIA WOES

http://www.travelweekly.com.au/news/premium-airline-to-solve-asia-woes

 

 

By Stephen Jones on 16 August 2011

 

Qantas with hold talks with Malaysia Airlines and AirAsia over the creation of a full service premium airline but chief executive Alan Joyce said it was only one possibility as it looks to build a major presence in Asia.

 

Joyce said it will talk with both carriers — which last week signed their own alliance — to see “what the opportunities could look like”.

 

Kuala Lumpur and Singapore are both among the possible locations for the new carrier. But wherever it ends up being, the operation will be a joint venture as under foreign ownership regulations Qantas will only be able to hold a maximum 49% share.

 

A deal with Malaysia, soon to be a oneworld member, is though the most likely scenario.

 

The new airline will carry a new brand, operate new A320 aircraft and offer a new “look and feel”, Joyce said.

 

He highlighted Qantas International’s declining market share into Asia as Asian airlines continue to eat into its business.

 

The new carrier will operate initially with 11 A320s with flights into Australia and intra-Asia.

 

Joyce said the creation of the airline, along with the new low cost Jetstar Japan, would effectively see the group’s dual-branded Australian business replicated in Asia.

 

Qantas’s frequent flyer scheme will also be extended to the new ventures, a major advantage, Joyce said.

Edited by Azri M.

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I wonder if MH staff and unions can handle so many changes at one go... :clapping:

I hadn't thought of that. They must be feeling a bit confused! I'm going to be flying with them again soon, so I might have a chat to the crew on my way to Paris to see wht they think of all these changes...

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I think QF will have a stake in the new airline under MH & AK called Sapphire :clapping:

That would make the most sense.

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Among the measure that Qantas has announced yesterday is its plan to offer one-stop services between Australia and Amsterdam, Rome and Istanbul with oneworld member-elect Malaysia Airlines.

 

This can only mean one thing : Qantas is almost certain to operate from Australia to Kuala Lumpur using its own metal ... a one-stop services to these three destinations is not possible if it relies on its present services to Singapore.

 

This certainly is good news.

 

But on the other hand, will a new premium carrier - 49% owned by Qantas - be a boon to Malaysia Airlines/AirAsia or will it further compete with them?

 

KC Sim

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Among the measure that Qantas has announced yesterday is its plan to offer one-stop services between Australia and Amsterdam, Rome and Istanbul with oneworld member-elect Malaysia Airlines.

 

This can only mean one thing : Qantas is almost certain to operate from Australia to Kuala Lumpur using its own metal ... a one-stop services to these three destinations is not possible if it relies on its present services to Singapore.

 

This certainly is good news.

 

But on the other hand, will a new premium carrier - 49% owned by Qantas - be a boon to Malaysia Airlines/AirAsia or will it further compete with them?

 

KC Sim

 

If QF is going to make KUL as the base for the new airlines, won't MAS share the cake too? I thought QF wished to collaborate with MAS.

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It is one thing to fly from Australia to KUL, and then send passengers scooting to destinations such as Amsterdam, Rome and Istanbul on code-shared Malaysia Airlines services.

 

But it is another thing to establish an airline in the home of its oneworld member-elect, Malaysia Airlines and compete on routes linking KUL to different parts of Asia. Whereas Malaysia Airlines previously had to contend with competition from AirAsia - now under the broader umbrella of a partnership in which Khazanah Holdings is the driver, a Qantas-linked premium carrier will effectively cart away almost half of the earnings ...

 

Assuming that the new airline is simply a 51:49% partnership between MAS and QF respectively, it remains to be seen whether MAS' gains from this new carrier is bigger than what it would earn if this carrier was never established. The fact that such a carrier will be operating A320s (and later A320Neos), many of the routes will likely compete with MAS' own premium service operations.

 

Strange times bring together strange bed-fellows indeed.

 

KC Sim

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The current state of QF is quite identical to MAS.

 

QF (and JQ) is battling with DJ and TT on its home turf. QF has put in many efforts and resources in JQ for a bigger market share in leisure / LCC segment. Internationally, QF has a higher cost base (mainly due to its staffing cost) compared to other international full-service airlines, thus makes it uncompetative. We hardly see any QF international route expansion in the recent years. Indeed, some of its routes have been replaced by JQ (eg. HNL, KIX).

 

Likewise MAS, MAS is (was ?) battling hard with AK for its domestic makert share where it has exhausted too much resources on this, hence lost its focus as an full service airlines. Internationally, MAS could have a better cost base compared to other foreign airlines. However, thanks to its inefficiency and mismanagement, MAS has no advantage in this regards. In order to stay competative with its current products, it is not suprise that MAS has low yield on many of its routes.

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DJ (or now Virgin Australia) is repositioning itself to become a premium airline in Australia and that will hurt QF domestic market pie share further. In order to stay competative within the industry, QF is to set up a premium airline in Asia with a lower staffing cost. However, whether this move will help to enhance QF presence in the premium market or expediting its shrinking market share in Australia ... :pardon:

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doubt now with the new airport charges n aircraft parking charges n pax tax that Qantas will seriously consider KLIA as a base for their new start-up - believed Changbi would be the best choice for them.

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