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

[Wilson Kook 0]

Caught my attention while I was web-browsing for fun facts..

 

 

 

Malaysia Airlines expected to be flying its A380 replacements for its ageing B747 long-haul fleet long before now but delays in the production - and MAS's agreement to defer delivery in return for substantial compensation payments - means that the first Malaysian A380 will not arrive until late in 2012 at the earliest.

 

And so, the double decker gate built by KLIA in anticipation of the arrival of the A380 has been sitting with the first floor unused except for overflow seating.

 

Now one of the larger operators of the A380, Emirates, is to introduce it onto the KUL - DXB route as from 1 December 2011.

 

It will fly on the horrible night-time schedule (leaving Dubai around 4 am and getting back there at around 10:30 pm although there is, at present, a much more passenger friendly timing in the schedule.

 

But it makes some kind of sense:the Middle East is, for airline purposes, often a transit point rather than a destination in its own right. And the timetable links dovetails with London flights, challenging e.g. MAS, SIA, BA/Qantas on that lucrative route - and with ticket prices that generally significantly undercut those other airlines and with a much greater baggage allowance, the ability to run an A380 from KLIA to LHR could make a significant inroads into the market.

 

KLIA sees the move as improving its position as a "world class international hub." That is, currently, wishful thinking. But if Emirates run the A380 onto Sydney via KLIA, that will begin to create a reputation as a hub which is dominated by Singapore's Changi airport at present.

 

With the rumours that Qantas may start to use KLIA as a secondary hub, after Changi, refusing to go away, the arrival of the Emirates A380 is a boost to an airport that has been snubbed by some major airlines despite superb facilities.

 

Link via The Chief Officers Network

 

Food for thought perhaps?

 

Every Tom, Dick & Harry Airline is going to want to have a share of the Sydney-KL-London market/route.

Edited November 9, 2011 by Wilson Kook

[Chris Tan 0]

Still no word about where RedQ will be based in?

[Y. J. Foo 0]

Where RedQ will be based is no longer relevant - QF is reported to have dropped the plan to create the premium carrier, per this Reuters report.

 

Qantas set to drop Asian carrier plans-report

SYDNEY | Sun Nov 27, 2011 5:39pm EST

 

Nov 28 (Reuters) - Australia's Qantas Airways is set to shelve plans for a new premium airline in Asia as global economic turmoil shakes management confidence in the project, the Australian Financial review reported without citing any sources.

 

The paper said that after spending a year putting together the plans for an up to A$500 million ($488 million) investment in the Asian unit, Qantas now favours a code share alliance with Malaysian Airline Systems Bhd.

The Asian carrier plan was aimed at using the region's low cost workforce to turnaround Qantas' loss-making international operations but sparked an union backlash.

Qantas felt the investment in the Asian airline would not sit well with the ratings agencies and its investment grade rating, the paper said. Qantas is the only airline globally with the investment grade rating.

 

Qantas and Malaysian Airlines are working towards a letter of intent in coming weeks on a code-sharing that would allow joint pricing, marketing and scheduling to begin about six to nine months after the agreement, the paper said.

Qantas Chief Executive Alan Joyce flew to Singapore last week for talks with Tony Fernandes, chief executive of Air Asia, which owns 20 percent of Malaysian Airlines. He then flew to Kuala Lumpur to thrash out the details of the proposed alliance, the paper said citing sources.

 

Qantas officials could not immediately be reached for comment by telephone or email.

The Asian carrier plan was one of the reasons for strikes by parts of the workforce. Strikes led to Qantas grounding its entire fleet last month in a drastic move aimed at ending union action.

 

That sparked a government intervention and involvement of Australia's industrial umpire, which gave the warring parties 21days to resolve differences or submit to binding arbitration.The parties have since moved to arbitration.($1 = 1.0253 Australian dollars) (Reporting by Narayanan Somasundaram; Editingm by Lincoln Feast)

 

[alberttky 0]

Pity... I was hoping that RedQ will give SQ a run for its money.

[flee 5]

Qantas Asia plan under threat

 

Qantas Airways is poised to walk away from its controversial plan to establish a new premium airline in Asia as the economic turmoil spreading from Europe shakes management confidence in the project.

 

The Australian Financial Review can reveal that after spending a year developing plans for a multimillion-dollar investment in the subsidiary airline in both Singapore and Kuala Lumpur, Qantas executives now favour shelving the capital-intensive project to focus on the low-risk option of an alliance with Malaysia Airlines.

 

The plan to establish a full-service subsidiary carrier in Asia sparked a fierce backlash from unions in ­Australia and divided politicians in Canberra. The bitter dispute culminated in the airline grounding its entire fleet to quell strike action, a move that has ended in the parties being sent to arbitration before Fair Work Australia.

 

Unions have argued that the Asia tie-up would result in Qantas moving a big part of its operations overseas at the expense of local jobs and have demanded that job security be included in industrial agreements.

 

Qantas told The Australian Financial Review last night that whatever the outcome of its Asia strategy, the airline would not be changing its stance on the job security claims at the centre of the industrial dispute.

 

Qantas and Malaysia Airlines are understood to be working towards a letter of intent in coming weeks for the new Asia tie-up, with a code-sharing alliance that would also allow joint pricing, marketing and scheduling to begin about six to nine months after that agreement is struck.

 

Qantas chief executive Alan Joyce flew to Singapore last week for discussions with Tony Fernandes, the chief executive of low-cost giant AirAsia, which also holds a 20 per cent stake in Malaysia Airlines. He then flew on to Kuala Lumpur to nut out details of the proposed alliance with executives at the Asian flag carrier, senior sources on both sides of the deal say.

 

Project Darwin, as the plan for the premium subsidiary Asian airline was known within Qantas ranks, would have required capital investment of between $400 million and $500 million in its first two years, a move unlikely to sit well with ratings ­agencies already twitchy about the airline’s investment grade credit rating.

 

Qantas is the only airline in the world with an investment grade rating, and Mr Joyce and chief financial officer Gareth Evans have repeatedly said the company would not do anything that would jeopardise that.

 

The airline has said it will spend $2.5 billion this financial year, almost all of it on new aircraft, and with a worsening global economic outlook, particularly in Europe, management has been scrambling to cut back capital expenditure.

 

While the unions may welcome the development, it is understood that Mr Joyce and the team behind Project Darwin are committed to establishing a new base in Asia when economic conditions improve.

 

AirAsia’s chief is understood to be a willing investor in the new airline once economic conditions improve, and unlike Singapore – where Qantas faced stiff opposition to its plans from flag carrier Singapore Airlines – the two Malaysian carriers and government officials have rolled out the welcome mat as they seek to boost Kuala Lumpur’s prominence in the region.

 

Some within Qantas management are understood to favour waiting for the arrival of the super efficient Boeing Dreamliner before revisiting the new airline, which the company had said would fly single-aisle Airbus A320 aircraft.

 

In the meantime, a joint venture with Malaysia Airlines that would mirror Qantas’s joint venture relationship with British Airways on the ­Kangaroo route will be sold as a short-term solution to the Australian ­airline’s diminished network in Asia.

 

As part of the deal, Qantas was likely to recommence flights to Kuala Lumpur and gradually shift its central hub in Asia to the Malaysian capital from Singapore, with partner British Airways also reorienting its focus in the region to Kuala Lumpur.

 

Qantas spokeswoman Olivia Wirth said the company was still looking at different options for establishing a hub in either Singapore or Kuala Lumpur, while indicating management’s preference may have shifted to the latter. “Obviously any investment will take into consideration the shifting global economic conditions,” Ms Wirth said.

 

“A cornerstone of this strategy is tapping into the forecast growth in the intra-Asia travel sector – not just at the low cost end, but premium traffic.

 

“With the recent changes at Malaysia Airlines, combined with their joining of oneworld, as well as our longstanding relationship with Tony Fernandes, this now presents a genuine option for Qantas to tap into Asia.”

 

A source said Qantas will cease talks with the Singaporean government and a local investor who would have taken a 51 per cent share in the airline, once the letter of intent is signed with Malaysia ­Airlines.

 

Qantas isn’t the only airline to take a step backwards in Asia right now – many of the region’s biggest players are feeling the brunt of weaker passenger loads at a time when high fuel prices are stretching operating costs.

 

Singapore Airlines reported a 49 per cent slump in second quarter earnings recently, while net income at Emirates dropped by 76 per cent in the six months ended September 30 after a $US1 billion surge in fuel costs.

 

The International Air Transport Association (IATA) has forecast a 40 per cent drop in global airline earnings next year as slowing economic growth hurts bookings.

 

According to one source, adding new routes from Kuala Lumpur in to China and India would be a top priority for the new alliance, with both airlines feeding in passengers to the Malaysian carrier’s aircraft. Having a bigger pool of passengers to draw on will also open the possibility of adding more routes to Europe and the Middle East out of Kuala Lumpur, one source said.

 

Malaysia Airlines will take delivery of five Airbus A380 superjumbos next year and 10 of the smaller twin-aisle A330 aircraft, raising its product standard at the same time as Qantas looks to begin code share flights.

 

One area of focus for the talks between the airlines has been the integration of their in-flight product, with Qantas keen to ensure passengers do not perceive a downgrade in service or comfort when switching from its aircraft to its partner’s, one source said.

 

Malaysia Airlines is already revamping the interiors of its Boeing 737 fleet into a more business-oriented configuration, and aircraft entering the fleet next year will arrive with a product comparable to that of the Australian carrier’s A380s.

 

While negotiations are mainly between Qantas and Malaysia Airlines, Mr Fernandes is understood to be playing a key role, with AirAsia driving many of the strategic changes at the flag carrier since a share swap between the two airlines in August.

 

For now, the talks only encompass an alliance between Qantas and Malaysia Airlines (a tie-up that would require approval from competition authorities in both countries), but could be a precursor to co-operation between AirAsia X and Jetstar.

 

Qantas and the unions are subject to arbitration before Fair Work Australia that may take several months.

 

Source

[KK Lee 5]

Qantas Asia plan under threat

Qantas chief executive Alan Joyce flew to Singapore last week for discussions with Tony Fernandes, the chief executive of low-cost giant AirAsia, which also holds a 20 per cent stake in Malaysia Airlines. He then flew on to Kuala Lumpur to nut out details of the proposed alliance with executives at the Asian flag carrier, senior sources on both sides of the deal say.

 

TF is de facto MH's CEO!

[Mohd Azizul Ramli 2]

I noticed that too. Uncle Tony was mentioned in like 4 times in the article. No mention whatsoever about Ahmad Jauhari, Rashdan Danny et al. Alan Joyce even seek Uncle Tony first before meeting the others from MH, indicating how important he is in the big picture.

 

Qantas chief executive Alan Joyce flew to Singapore last week for discussions with Tony Fernandes, the chief executive of low-cost giant AirAsia, which also holds a 20 per cent stake in Malaysia Airlines. He then flew on to Kuala Lumpur to nut out details of the proposed alliance with executives at the Asian flag carrier.

 

AirAsia’s chief is understood to be a willing investor in the new airline once economic conditions improve, and unlike Singapore – where Qantas faced stiff opposition to its plans from flag carrier Singapore Airlines – the two Malaysian carriers and government officials have rolled out the welcome mat as they seek to boost Kuala Lumpur’s prominence in the region.

 

“With the recent changes at Malaysia Airlines, combined with their joining of oneworld, as well as our longstanding relationship with Tony Fernandes, this now presents a genuine option for Qantas to tap into Asia.”

 

While negotiations are mainly between Qantas and Malaysia Airlines, Mr Fernandes is understood to be playing a key role, with AirAsia driving many of the strategic changes at the flag carrier since a share swap between the two airlines in August.

I could also foresee RedQ to be reincarnated in the form of Caterham Jet.

 

Anyway this is an outstanding piece of news - Changi is now confirm wont be getting Qantasia, MH gets a new pool of passengers from the proposed code share with QF while at the same time futher reinforcing its position pre oneworld, AirAsia Group to benefit from Uncle Tony and all his current and future undisclosed deals/ventures with QF/JQ that do not necessarily have anything to do with MH, the status quo of MH and AK as anchor airlines in KLIA remains unchanged as the possible threat from RedQ is now fully eliminated and MAHB finally gets the Flying Kangaroo and the Speedbird to land in KLIA back after all these years.

[flee 5]

I noticed that too. Uncle Tony was mentioned in like 4 times in the article. No mention whatsoever about Ahmad Jauhari, Rashdan Danny et al. Alan Joyce even seek Uncle Tony first before meeting the others from MH, indicating how important he is in the big picture.

That is because TF plays in the international league whereas Khazanah/GLC executives play in the kampung league.

 

Malaysian GLCs are inward looking, that is one of the reasons why their options are so limited. TF has a good reputation in international business circles and this is the added dimension and value that he can bring to MH.

[flee 5]

Qantas Denies Shelving Plans For Asian Airline, May Seek Alliance With MAS Instead

 

MELBOURNE, Nov 28 (Bernama) -- Qantas says reports that it will delay the establishment of an Asian airline are speculations, but the airline does say it needs to be flexible depending on market conditions.

 

Uncertain global economic climate, particularly in Europe, has prompted Qantas' management to consider delaying plans to establish a premium carrier in Asia and instead seek an alliance with Malaysia Airlines (MAS), The Australian Financial Review reported.

 

Qantas Chief Executive Alan Joyce said Monday no final decision has been made on the establishment of an Asian carrier or an alliance.

 

"We obviously keep all of our options open. We believe a new premium airline in Asia is important for us.

 

"The timing of that airline and how it works with partners are still part of the discussions we're having with both Singapore and Malaysia and no final decision has been made on what we are going to do," he told ABC Radio.

 

Joyce said Qantas has to be flexible on its plans and must be able to respond to market conditions.

 

"We're not going to communicate or talk about the speculations in the press," he added.

 

Qantas on Monday forecast a fall in the first half underlying profit of up to 66 per cent due to A$650 million in costs from rising fuel costs and industrial disputes with unions.

 

It expects to post an underlying net profit of A$140 million to A$190 million in the six months to Dec 31, 2011, which compares to A$417 million underlying profit in the first half of 2010/11.

[flee 5]

Qantas to fast-track plans to set up Asian carrier

 

QANTAS'S chief executive, Alan Joyce, insists he will accelerate strategic plans to forge closer alliances with other airlines and set up an ultra-premium carrier in south-east Asia as higher jet fuel prices and the fallout from industrial action severely dents profitability in the first half.

 

The airline has warned its underlying profits will fall by as much as 66 per cent to $140 million in the first half due to high fuel prices and $194 million in costs arising from industrial action and the grounding of its fleet late last month.

 

The cost of the grounding included a $70 million hit from lost revenues, refunds and accommodation for stranded passengers over three days. Despite the precarious state of the global economy, Mr Joyce said Qantas still planned to establish a premium airline in the Malaysian capital, Kuala Lumpur, or Singapore next year. However, he conceded the airline maintained flexibility in its planning in the event global markets deteriorated significantly.

 

Qantas has indicated alliances with carriers such as Malaysia Airlines will be given top priority as part of its efforts to tap a burgeoning travel market in Asia and turn around its international operations. It remains in negotiations with Malaysia Airlines about forging a ''deeper alliance''.

 

''Nothing has changed about our preparedness to turn around our international business,'' Mr Joyce said. ''If anything, it means we have to accelerate and keep on going with our plans to turn it around because the high fuel prices and the economic conditions mean that the turnaround plan is critical.''

 

Mr Joyce was responding to speculation that Qantas was about to walk away from plans to set up a premium airline - most likely to be called RedQ or OneAsia - in south-east Asia.

 

Kuala Lumpur has become a more attractive alternative for Qantas than Singapore since Malaysia Airlines embraced Oneworld, the same airline grouping the Australian airline belongs to, and Tony Fernandes, the founder of low-cost carrier AirAsia, took a 20 per cent stake in Malaysia's national flag carrier. However, a final decision from Qantas on plans for an ultra-premium carrier is still weeks away.

 

Macquarie Equities analysts said they believed management was ''leaning towards a less capital intensive, deeper codeshare arrangement with Malaysia Airlines to begin with rather than starting up its own Singapore-based premium carrier''.

 

Shares in Qantas ended a seven-day losing streak, closing up 5¢ at $1.505, despite the large financial hit from the industrial dispute.

 

Analysts said investors were banking on a return to more normalised earnings in the second half, following resolution of the industrial dispute. Qantas said the first-half performance reflected uncertainty in global economic conditions, higher fuel prices and volatile foreign-exchange rates. It has estimated that its fuel bill for the first half will increase by about $450 million to $2.2 billion.

 

Source

Edited November 29, 2011 by flee

[BC Tam 2]

I wonder if things will develop to extent of the merger/share swap (MH/QF) idea mooted some time back ?

Now that would be a quantum leap indeed

Edited November 29, 2011 by BC Tam

[alberttky 0]

I wonder if things will develop to extent of the merger/share swap (MH/QF) idea mooted some time back ?

Now that would be a quantum leap indeed

 

I won't be surprised to see another round of strikes if that happens.

[flee 5]

I think a closer MH/QF alliance will be very beneficial to both airlines. They really need to work hard to align the routes and products to make the synergy work for both airlines.

[KC Sim 2]

I get the feeling that this will bring Qantas back to KLIA ... and perhaps BA too.

 

KC Sim

[Ikman Ikreza 0]

Qantas exploring new airline with Tony says Sydney paper

By Lee Wei LianNovember 29, 2011

 

KUALA LUMPUR, Nov 29 — Australian airline Qantas is focused on starting a new airline with Tan Sri Tony Fernandes and making Kuala Lumpur its hub reported the Sydney Morning Herald (SMH) yesterday.

It said that Qantas CEO Alan Joyce was working to speed up the launch of its new Asian airline despite some reports that it has been shelved.

 

“Joyce is believed to be continuing to plug away at a number of start-up venture proposals with Fernandes in Malaysia,” said SMH.

 

It added that a deal with the AirAsia co-founder would give Qantas ready access to a bank of aircraft orders once regulatory approval was granted.

 

“It also gives Qantas the option to use Kuala Lumpur as a cheap hub to fly passengers to Europe,” said the report. “This means it could scrap the Sydney to London service and instead use its Asian airline to run its international routes to Asia and Europe.”

 

Joyce was earlier reported to have said that Qantas planned to start a premium airline in either Kuala Lumpur or Singapore next year.

 

Fernandes meanwhile said on November 14 that he had “ideas” for a super premium airline but declined to reveal the name or any further details.

 

He also said that if he started a new premium airline, it would involve Malaysia Airlines, in which he also holds a substantial stake.

 

Attempts to reach Fernandes for comment were unsuccessful.

 

Source : http://www.themalaysianinsider.com/business/article/qantas-exploring-new-airline-with-tony-says-sydney-paper/

[Mike P 0]

Alan now seems favouring KUL very much, not only shifting QF to KUL but also to form RedQ in KUL and collaborate with Tony!

[alberttky 0]

Alan now seems favouring KUL very much, not only shifting QF to KUL but also to form RedQ in KUL and collaborate with Tony!

 

KUL is cheaper to operate out of compared to SIN.

[flee 5]

I think QF's AJ has fallen for AK's TF's sweet talk...

 

But looking at the big picture, a QF/MH and JQ/D7/AK collaboration does make sense. It is a win-win partnership.

[BC Tam 2]

Sorry to pop the happy bubble, but please note that no one has said anything that can be remotely considered committal about KUL, just run of the mill beating round the bush lingo and a whole load of analysis from the ..... analysts

Bear in mind it's a common, but tried and tested, tactic to appear to favour a party in order to apply negotiation pressure on the opposing side

[Mike P 0]

Sorry to pop the happy bubble, but please note that no one has said anything that can be remotely considered committal about KUL, just run of the mill beating round the bush lingo and a whole load of analysis from the ..... analysts

Bear in mind it's a common, but tried and tested, tactic to appear to favour a party in order to apply negotiation pressure on the opposing side

 

What analyst and who? Those articles and statements were mentioned clearly by Alan Joyce, CEO of QF. No one but him...

[Izanee 0]

BC tam, agree with you.

Mike - until something is confirmed and the deal is sealed on paper, TRUST NO ONE!

[alberttky 0]

Qantas still eyes Asia

 

 

Qantas (QF) has denied Australian media reports that its Asian strategy has been put on hold and confirmed that discussions were continuing with Malaysia Airlines (MH) and Singaporean interests.

 

In August, the Qantas Group announced it was setting up a joint venture with Japan Airlines and Mitsubishi to form Jetstar Japan, and it would also launch a premium branded airline in Asia to tap the rising middle class (ATW Daily News, Aug. 15).

 

On Monday, an airline spokesperson told ATW that the “a cornerstone of the airline’s policy of revitalizing its international operations is tapping into the forecast growth in the intra-Asia travel sector—not just at the low-cost end but premium traffic.”

 

While discussions are continuing with Singaporean interests, the recent tie-up between MH and AirAsia, which has a cooperation agreement with QF’s low-cost airline Jetstar, has significant appeal.

 

"With the recent changes at Malaysia Airlines combined with their joining of oneworld, as well as our long-standing relationship with Tony Fernandes [CEO of AirAsia], this now presents a genuine option for the Qantas Group to tap into Asia. At this stage, nothing is ruled in or out and all options are under serious consideration,” the QF spokesperson said.

 

http://atwonline.com/airports-routes/news/qantas-still-eyes-asia-1129

-------------------

Singaporean interest??

[JuliusWong 0]

It would turn out to be one of the worst kept secret...similar to Virgin Australia's livery....(which I find delightful, btw).....Come on, QF, who do you want to marry?? MH-AK or Singapore?

 

But isn't AirAsia Japan competing with QF's Jetstar Japan?? Wow, this aviation thing is getting too complicated. Don't think ANA and JAL are very happy their partner is jumping into bed with others.....

Edited November 30, 2011 by JuliusWong

[Mike P 0]

BC tam, agree with you.

Mike - until something is confirmed and the deal is sealed on paper, TRUST NO ONE!

 

Yeah, don't trust Alan Joyce.

[alberttky 0]

Qantas (QF) CEO Alan Joyce is convinced the future of travel in Asia, the world's fastest-growing market, is just as much about premium airlines as LCCs.

 

Joyce told a conference in Sydney last week that within two decades, 16% of the world's middle class would be in East Asia.

 

''We are convinced the future of Asia is not just about low-fares airlines travel,'' he said. ''Chinese visitors are pouring into Australia. And we know that Chinese travelers rate prestige brands and safety as among their top travel priorities.''

 

According to the Sydney Morning Herald, Joyce said demand for high-end travel is why a cornerstone of QF's international strategy is tapping into the growth in intra-Asia travel at the premium end of the market.

 

''Whatever happens in financial markets over the coming weeks and months, we know that Asia will continue to play a larger part in the global economy and a bigger role in the world,'' Joyce said.

 

QF is in talks with various groups in Asia about setting up a premium airline in Singapore or Kuala Lumpur. Analysts suggest a deal is most likely with Malaysia Airlines and AirAsia.

 

http://atwonline.com/airports-routes/news/qantas-targets-asia-destinations-1209