The party may soon be over, says Sir Rod
SYDNEY – Former international airline chief Sir Rod Eddington has forecast that Singapore’s Tiger Airways will have a significant impact in shaking up aviation in Australia.
In a report in the Sydney Daily Telegraph, Eddington predicted that aviation’s current sweet spot may be short-lived, particularly in the Australian domestic market.
Sir Rod, who led Cathay Pacific, Ansett and British Airways at various times over the past two decades, said aviation had been “cash flow negative since the Wright brothers”.
“The industry is economically dysfunctional,” he told an Australian British Chamber of Commerce lunch.
While capacity constraints had led to a temporary increase in profits, that would be tested soon when more planes and new airlines entered the market.
“In some ways, the domestic (Australian) market is one of the few truly rational markets in the world because it’s not subsidised,” he said.
“History has said this market will support two airlines.”
It was already supporting “two and a half”, with the success of the Qantas-owned budget offshoot Jetstar. Although “the vast majority of airlines that start fail” in the Australian market, the looming entry of the Singapore Airlines-backed Tiger Air would be interesting because it was well resourced and managed.
“It will be interesting if Tiger steps up to 20 planes,” Sir Rod said.
In addition to the new seats Tiger will introduce to the domestic market with its five planes next month, Qantas has orders for 12 new Bombardier Q400s turboprop aircraft for its Qantaslink network.
Similarly, Virgin Blue has orders for 20 Embraer jets to use domestically.
There will also be more international seats available, with Air Asia X promising A$99 flights between the Gold Coast and Kuala Lumpur, and Qantas taking delivery of 65 Boeing 787 Dreamliners to support the long-haul international plans of Jetstar.
Report from the Sydney Daily Telegraph
Ian Jarrett
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