Singapore Airlines has announced a new low fare sale from India to select destinations in South East Asia and Australia.

As per the ad in today's Times of India, Bangalore edition, the fares round-trip ex-Bangalore to Singapore is INR 16,830, Denpasar/Bali/Kuala Lumpur/Penang/Langkawi/Kuching/Bangkok INR 23,980, Sydney/Perth/Brisbane/Melbourne/Adelaide INR 41,350. These include taxes and surcharges.

Fares are for economy class travel. Tickets must be purchased by January 15, 2009 and will be valid for travel from December 29, 2008 to March 31, 2009 for Singapore and South-East Asia and from February 01, 2009 to June 30, 2009 for the Australian destinations.

Similar offers are available from other Singapore Airlines cities in India.

One can also expect SQ's competitors, Malaysia Airlines, Thai Airways, and Jet Airways, to follow suit.

Since the travel agents' boycott of Singapore Airlines commences today, I recommend Bangalore Aviation readers to visit the Singapore Airline website.

As I indicated in my previous article, there are strong rumours of a "merger" or "tie-up" between Australian carrier Qantas and Malaysian Airlines (MAS). Given the regulatory stranglehold and national politics involved in Asia, a full merger is next to impossible.

Not only do I feel that this tie-up will happen, I strongly believe that it will result in positive results for all the players, not just the airlines.

The future for Qantas is Asia, but either due to a difference in business culture, or national ego, or economic and/or market positions, Qantas really has no serious potential partners in Asia, other than Malaysian. A tie-up with either Singapore Airlines or Cathay Pacific or Japan Airlines and can be written off due to culture or ego reasons. Garuda, Thai, Philippines, Eva, China Air, Air China, or any of the Taiwanese or Chinese airlines are too small or do not offer adequate economic benefits to Qantas.

Qantas CEO, Alan Joyce, had said that Qantas was looking to be the senior partner in any merger or similar relationship that the carrier entered into. The recent failure of the merger talks with British Airways highlights Joyce's desires.

Under the able stewardship of Idris Jala, Malaysian has staged a phenomenal comeback. After years of losses, government intervention and its resultant inefficiencies, Jala has moved MAS in to profitability, for the last 3 years. Even until the third quarter of 2008, despite the economic crises, he has delivered profits. Driven by its formidable low cost carrier (LCC) competitor AirAsia, and Jala, MAS has undertaken ruthless cost cutting and route rationalisation. Despite this, Jala recognises, MAS will never meet the cost base of AirAsia, and has moved the airline up the value chain, focusing on the higher end of the market, instead.

Financially, Qantas has been in good profit for many years, thanks to the "Kangaroo Run", and has a decent cash balance sitting ready, should a deal with MAS come about.


At the same time, liberalisation is spreading through the region, may be in fits and starts. On December 1, the 70 year old duopoly of Malaysian Airlines and Singapore Airlines on the lucrative Singapore-Kuala Lumpur sector was opened up, after 5 years of lobbying by the LCCs of both countries, but Malaysia predominantly. Capacity has trebled virtually instantly.

Kuala Lumpur International Airport (KLIA) has much to offer. The airport was built and promoted by former Malaysian Prime Minister Dr. Mahathir Mohammed, as a competitor to Singapore's famous Changi Airport, a base for many international airlines, including Qantas.

Despite trying as hard as they could, KLIA could never match the economies of scale, and frequencies of Changi, which brought in increasing numbers of passengers. For many years, KLIA lagged, almost becoming a colossal white elephant. The poor situation at KLIA was further aggravated by its own government. For years, Malaysia resisted liberalisation of the KL-Singapore route. Apart from being one of Malaysian Airlines' most profitable routes, there was a constant fear of the undermining of KLIA as a hub, since Changi is easily the more preferred hub by both airlines and passengers.

Thanks to the fast growing AirAsia, KLIA is now making a comeback, as a low cost hub, but we should keep in mind, the airport still has high end facilities as well. KLIA is also a spacious airport, and with its planned expansion, will offer considerable growth opportunities to any global scale airline.

This low cost positioning is important. While Qantas withdrew from KLIA, due to low yields, and preferring to build economies of scale at Singapore, it has two low cost subsidiaries JetStar and Singapore based JetStar Asia. Jetstar Asia already flies to KLIA, and Jetstar used to fly the Sydney-KL route, but has withdrawn temporarily during the economic slow down.

Jetstar Asia has only a narrow body fleet, but is already reaping benefits from the recent KL-Singapore route liberalisation. Jetstar has a fleet of six Airbus A330's, two of which fly Australia to Japan (service due to terminate in December 2008), and can easily use KLIA as a base to expand the Qantas brand in to India, south-east Asia, the middle east, Europe, and especially the United Kingdom, in response to the challenges of the ever busy AirAsia who is making KLIA as a low cost hub for Australians, with its upcoming UK service. Once Jetstar receives its Boeing 787 Dreamliners, hopefully in 2010, the KLIA base will blossom as an alternate "Kangaroo run" route.

A well established base in the backyard of arch-rival Singapore Airlines, while still maintaining its presence at Changi will suit the Qantas/Jetstar group just nicely, affording them and potential partner, Malaysian Airlines, more options, with Qantas still maintaining presence at Changi.

Unlike the talks with British Airways, in case of Malaysian Airlines, the Malaysian government are serious and any deal will have their blessing. So it will behoove Qantas to proceed. In the near future, Qantas and Malaysian can extend their Oneworld alliance membership further with code sharing and various joint strategies. In the medium term, to overcome the restrictive regulatory framework in South-East Asia, I expect that Qantas and Malaysian Airlines will have to enter in to some time of cross-holding and also for Qantas buy a significant minority share in Malaysian.

A deal, if consummated, with help re-define the south-east Asian skies, and benefit not just the airlines, but also KLIA.

As per a Bloomberg article, in the face of continuing declines in global air travel,

British Airways Plc, Europe’s third- largest airline, will cut more than 100 jobs at London’s Gatwick airport as it reduces services there by 15 percent from mid-2009.

The number of aircraft based at the airport will be reduced to 37 from 41, the Harmondsworth, England-based airline said today in an e-mailed statement. The cuts to ground operations staffing will be on a voluntary basis, according to the statement.

The story also refers to the ongoing merger discussions between British Airways and fellow OneWorld partner Qantas.

In parallel I read about a PTI report about Malaysian Airlines seeking global partnerships. As per the report

Malaysia’s national carrier, Malaysia Airlines (MAS), is seeking partners to grow further but has not commented on reports that it is seeking a merger with British Airways and Australia’s Qantas. “We are in talks with a number of airlines on collaborating and creating synergies for growth. This ranges from Joint Ventures and code shares to interlining partnerships. For example, we have signed a memorandum of understanding with Qantas on a joint venture on maintenance, repair and overhaul,” Idris Jala, Managing Director and Chief Executive Officer, MAS said in a statement day before yesterday.

In Malaysian, Qantas will get access to the lucrative ASEAN, and intra-Asian routes, and will fulfill it's goals of becoming a truly global carrier. A Malaysian merger or partnership with also give the behemoth base level access to the ultra-large and very under-utilised Kuala Lumpur International Airport (KLIA). KLIA does have the potential to become a formidable competitor to Singapore's Changi Airport, a purpose for which former Malaysian Prime Minister Dr. Mahathir Mohammed championed its mammoth construction. It just needs the right amount of traffic, the amount a global carrier British Airways-Qantas-Malaysian will give.

The tiny U-Tapao Airport (UTP), also spelled Utapao and U-Taphao, is a public airport serving Rayong, a city in Thailand. Primarily a naval aviation base, it is approximately 90 miles (140 km) southeast of Bangkok, near Sattahip on the Gulf of Siam. It south of route 3 (Thanon Sukhumvit) at km 189, about a 45 minute drive from Pattaya (Thailand's most popular beach resort).

U-Tapao has become sole, if meager and hellish ray of hope for the thousands of desperate passengers stranded in Bangkok due the forced closure of Suvarnabhumi and Don Muang airports by the P.A.D. movement in Thailand.

Thai Airways International announced that it will provide 31 special flights to and from U-Tapao Airport to serve stranded tourists. It said 18 flights will leave the airport and 13 flights will land at the airport.

The Thai release said tourists must check in at the Centara Grande Hotel at Central World five hours before departure. Passengers, who arrive on the 13 in-bound flights, will be transferred to the Centara Grande, it said.

Malaysia Airlines (MAS) has activated a contingency plan to cater for its passengers stranded in Bangkok due to the closure of the Suvarnabhumi International Airport.

In a statement, MAS director of operations Datuk Tajuden Abu Bakar said, "Instead of operating out of Bangkok, we have temporarily shifted our flight operations to the U-Tapao International airport. This alternative is in addition to our twice daily flights from Phuket which is also open on seat-available basis to our ticket holding passengers who wish to travel out of Thailand. However, customers will have to reach U-Tapao on their own. Likewise customers who wish to travel on any one of our twice daily flights from Phuket will also have to make it to the island resort on their own," he added.

Japan's All Nippon Airways (ANA) said yesterday it would organise a special flight to U-Tapao to pick up tourists stranded by the protests.

The Singapore airlines website informs that, "Singapore Airlines is operating a twice-daily service between U-Tapao and Singapore up till Wednesday, 3 December. A decision will be made in due course on operations beyond Wednesday depending on the situation and continuing demand."

"Flights are planned to depart U-Tapao at 14:00 and 19:00 local time. However, facilities at U-Tapao are very basic and the airport is heavily congested, so customers should be prepared for lengthy delays."

U-Tapao airport was jam-packed with foreign tourists waiting to catch a flight home. Airport authorities, say it was a major chore to process so many travellers due to the lack of adequate facilities.

There was a 2 km long queue of traffic into the airport compound and we witnessed many passengers, worried about missing their flights, abandoning their transport and walking with their baggage the final kilometre in the afternoon sun. At the airport they were greeted with the sight of an enormous throng of people and baggage everywhere.

"It's complete chaos and pandemonium," said Bonnie Chan, 29, from San Diego, California.

"We've been given incorrect information from the airlines. The US embassy says they can't help us. We're high and dry. The airlines keep giving us the run-around."

While there is runway and taxiway space, the terminal facilities are woefully inadequate since the navy-owned airport is mainly designed for military purposes. It can service only around 200 people a flight. There are only four check-in counters, two x-ray machines, six counters for customs services, one belt for arriving passengers and one crane to lift luggage into the planes.

The airport is normally reserved for charter flights and Bangkok Airways and usually serves only a few flights a day. But since the the seizure of Suvarnabhumi airport by the People's Alliance for Democracy (PAD), the number of travellers has increased dramatically to 3,000 people a day, with 12 departures and 16 arrivals, mostly international flights.

AFP Image
A local hotel even provided dancing girls who tried in vain to cheer thousands of travellers as they tried to flee protest-hit Thailand.

Authorities had laid on extra toilet facilities and refreshments but for those with a long wait, camping outside the airport building was just one more of a long series of inconveniences, especially for those who had been stranded in Thailand for the last 4 days or more, and all of them, "just wanting to get home."

Images courtesy Pattaya Daily News and Wikipedia