Merger of neighbouring rivals SIA and Qantas is not a good strategic move
Suggestions that Australia's Qantas Airways could seek an equity alliance with Singapore Airlines (SIA) have created a buzz in the regional aviation industry.
Singapore's Transport Minister Yeo Cheow Tong fed the rumour mill yesterday by suggesting the carriers were already in talks, but a deal with SIA is not the only option as Qantas ponders its future growth strategy.
Australian Prime Minister John Howard set tongues wagging last week when he raised the issue of whether the two would 'remain as separate entities' but the consensus among analysts is still that a tie-up is far from being a done deal.
'All the talk came out of a whole public smoke and mirrors campaign in which people are trying to set agendas and influence policy, rather than a real suggestion of what might happen,' said Peter Harbison, director of industry analyst Centre for Asia Pacific Aviation.
Reports of a Qantas-SIA deal come in the context of several highly politicised issues.
The Australian cabinet is reviewing the foreign ownership limit on Qantas, which restricts overall foreign investment to a 49 per cent stake in the airline and any one strategic foreign investor to 25 per cent.