As I mentioned in a previous article, there are strong rumors of a "merger" or "tie-up between Australian carrier Qantas and Malaysian Airlines (MAS). Given the stranglehold of national and regulatory policy in Asia, a full merger involved is almost impossible.
Not only do I feel that this tie-up will happen, I firmly believe that will translate into positive results for all players, not just airlines.
The future for Qantas is in Asia, but due to a differenceThe corporate culture or economic or national ego and / or market positions, Qantas did not really serious potential partners in Asia, except Malaysia. A merger with both Singapore Airlines and Cathay Pacific and Japan Airlines and can be written off for reasons of culture or ego. Garuda, Thai, Philippines, Eva, Air China, Air China, or any of the Taiwanese and Chinese airlines are too small or inadequate economic benefits for Qantas.
Qantas CEO Alan Joyce said:Qantas has been looking after the senior partner in a merger or similar report, which received the vector. The recent failure of talks to merge with British Airways increases Joyce's wishes.
Under the able guidance of Idris Jala, Malaysia has a phenomenal comeback. After years of losses, government intervention and the resulting inefficiencies, Jala, MAS has moved into profit for the last 3 years. Even until the third quarter of 2008, despite theCrisis, he has delivered the profits. Guided by his terrible for low cost (LCC) AirAsia competitors Jala, MAS has made relentless cost reduction and rationalization of the route. Despite this, recognizes Jala, MAS will never cost base of AirAsia, and moves, the airline has the value chain, the upper end of the market, rather than up.
Qantas is financially in good profits for many years, thanks to the "Kangaroo Run" and sat for a decent cashready, should be an agreement with MAS.
At the same time, the diffusion of liberalization across the region, can in spurts. On 1 December the duopoly of 70 years of Malaysian Airlines and Singapore Airlines on the lucrative Singapore-Kuala Lumpur sector was turned on, open for five years lobbying the LCC of the two countries, especially Malaysia. The capacity is now almost tripled.
Kuala Lumpur International Airport (KLIA) has much to offer. The airport wasbuilt and financed by former Malaysian Prime Minister Dr. Mahathir Mohammed, in competition with the famous Changi Airport in Singapore, a base for many international airlines, including Qantas.
Despite trying hard as they could be, could never KLIA with the scale and frequency of Changi, which led to an increasing number of passengers. KLIA has been for many years, almost to a huge white elephant. The bad situation was made worse by its KLIAGovernment. For years he opposed the liberalization of Malaysia KL-Singapore route. In addition to being one of the most profitable routes in the Malaysian Airlines', there was a constant fear of jeopardizing the KLIA as a hub, Changi Airport is as easy as prime hub for both airlines and passengers.
Thanks to rapid growth AirAsia, KLIA is now of a return, as a low-cost hub, but we must bear in mind also the airport of high-end systems as well. KLIA is also a major airportand his airline planned expansion will provide significant growth opportunities on a global scale.
This positioning at low cost is important. While Qantas withdrew from KLIA to build because of low yields and better economies of scale in Singapore, there are two low-cost airline Jetstar, Jetstar Asia and Singapore. Jetstar Asia and Jetstar already flies used KLIA to fly Sydney-KL flight is slow, but temporarily suspended during the economic crisis.
JetstarAsia has only a narrow body fleet is already reap the benefits offered by the recent opening KL-Singapore route. Qantas has a fleet of six Airbus A330 (service by the end of December 2008), two of which fly to Japan and Australia can easily use KLIA as the basis for the Qantas brand to expand into India, Southeast Asia, the Middle East, Europe and particularly in the United Kingdom, in response to the challenges of the ever busy, making KLIA AirAsia is a low-cost hubAustralians with his next service in the UK. Once he receives his Jetstar Boeing 787 Dreamliner, hopefully in 2010, based KLIA as an alternative "Kangaroo run" flower route.
A well-established base in the backyard of rival Singapore Airlines, while maintaining its presence at the Changi Airport, Qantas / Jetstar group fits just as well that you and your potential partner, Malaysian Airlines, more opportunities for the presence of Qantas maintenance Changi.
In contrast with the talkswith British Airways, in the case of Malaysian Airlines, the Malaysian Government will deal seriously and all have their blessing. So Qantas is fitting to continue. In the near future, Qantas and Malaysia to expand its membership ahead with Oneworld alliance code-sharing and a range of strategies. In the medium term to overcome the restrictive regulatory framework in Southeast Asia, I expect the Qantas and Malaysian Airlines must give time for the cross-holding andand for Qantas to buy a significant minority in Malaysia.
An agreement, if completed, with the help redefine Southeast Asian skies, and not only benefit the airlines, but also KLIA.
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