Australia is not willing to sign an open skies accord with Singapore until it can ensure more European nations to allow Qantas or other Australian airlines to carry traffic between Singapore and Europe.

Singaporean transport minister Yeo Cheow Tong and his Australian counterpart John Anderson give differing descriptions of a meeting on liberalising the Australia-Singapore bilateral. Yeo says the talks set a "road map" for agreement on open skies, while a more cautious Anderson says he understands Singapore's views on open skies, but adds: "I have not made a decision yet."

Singapore Airlines is eager for such an accord, which would clear the way for it to operate transpacific flights between Australia and the USA in competition with Qantas. But European fifth freedoms could be a stumbling block to an Australia-Singapore pact. Yeo calls Qantas's demands for more access from Singapore to Europe "a red herring".

After his talks with Anderson, Yeo said: "Today Qantas flies about 45 flights into Singapore and of those 45 flights, 24 go onward to Europe with full rights to carry passengers from Singapore to Europe." But Anderson says that better access for Qantas into Europe is critical to further liberalisation with Singapore.

Qantas chief executive Geoff Dixon is more specific, insisting that reciprocal fifth freedoms must be "sequenced carefully". He adds: "This lies at the heart of our concern that Singapore Airlines should not be granted access to the transpacific route at this time." Immediately after his talks with Yeo, Anderson left for Europe to pursue better access. His office predicts a decision on the Singapore bilateral within the next few months.

Three other issues remain, including timing. Singapore has said it is willing to phase in transpacific flights over up to two years. Australia's position may depend on how soon it can secure more European fifth freedoms.

Transpacific capacity is also a concern for Canberra. Singapore Airlines will be the world's first Airbus A380 operator and it could deploy the new aircraft on the Pacific six months before Qantas receives its first A380. Singapore's only stipulation is that its transpacific flights operate from Sydney.

It looks less likely that Virgin Blue will pursue the idea of launching its own transpacific operation. The Patrick Corporation has gained majority control and stated its preference for Virgin Blue to focus on domestic issues.


Source: Airline Business