Jetstar’s Joyce calls for open skies for Asia
In an AAP report this week, Jetstar chief executive Alan Joyce says that regulation of the aviation industry is blocking consolidation in the Asia Pacific region and needs to be reduced.
This week’s two-day Asia Pacific Aviation Summit wrapped up in Sydney on Wednesday amid debate about the need to liberalise the region’s main aviation routes, with Alan Joyce saying that bilateral arrangements, negotiated between individual countries, tended to characterise access to routes and airports in the region – a situation he says must change.
“The bilateral arrangements cause all sorts of problems with consolidation,” Mr Joyce said during a panel discussion.
“It does make consolidation much harder and the consolidation issues are going to be tied up with liberalisation.”
Restrictions on foreign ownership of airlines is another major factor holding back regional consolidation and the industry won’t be more profitable until those limits were swept away.
“The only way that will happen is for liberalisation to happen, consolidation to happen and for governments to get out of airlines,” Mr Joyce said.
“I’d like the `big bang’ approach because it would give us access into Asia and I think ourselves and Virgin would love to fly into Asia.”
But Patee Sarasin, chief executive of Thai carrier Nok Air, said liberalisation was unlikely to happen soon, adding, “Can I tell you, in Asia, it’s not going to happen”.
“Nothing’s going to change in 10 years, just have fun, enjoy yourself, make a little bit of money and relax.”
In late 2004, Qantas launched its Singapore-based airline, Jetstar Asia, to gain exposure to the burgeoning low cost air travel market in Asia.
Qantas, which owns the Australian domestic carrier Jetstar, has a 45 per cent stake in the carrier to comply with foreign ownership restrictions.
But despite the ownership structure, Mr Joyce lamented the fact that Qantas could not gain access to the lucrative Singapore to Kuala Lumpur (KL) route.
“Up in Singapore we can’t fly Singapore to KL and I keep saying it’s a very important market, very protected and yet we’re not allowed to fly that market,” he said.
“And yet, because Australia’s very liberal, (Tiger Airways chief executive) Tony (Davis), if he wanted tomorrow, could fly to Sydney.”
But the Tiger boss rejected the argument as unfair, pointing out Tiger couldn’t fly to Kuala Lumpur either.
Mr Davis also rejected Mr Joyce’s argument for `big bang’ liberalisation, saying region was ill-prepared.
“Time does enable change to occur and the big thing about Asia is… the market is six times bigger than the European Union,” he said.
“It doesn’t need `big bang’ deregulation to create opportunities for us.”
“We have open skies with China, we have open skies between Singapore and Australia, so what we’re doing is taking advantage of the liberalisation as it occurs.”
Report by The Mole
John Alwyn-Jones
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