More Asian states expected to join 'open skies' pact

More Asian states expected to join 'open skies' pact

SINGAPORE (AFP): Asian countries are expected to follow
Singapore's lead in forging an "open skies" pact with the United
States, a top official of Singapore Airlines Ltd. (SIA) said in
an interview published yesterday.

SIA deputy chairman Cheong Choong Kong expressed confidence
that Malaysia would soon reach a similar deal with Washington to
liberalize aviation traffic, followed by Taiwan and South Korea,
and possibly Brunei and New Zealand.

Cheong said, however, that there was a need for bilateral
Asian aviation agreements which would pave the way for a
multilateral deal beneficial to carriers in Asia, the world's
fast growing aviation market.

"The point to note is that all these agreements have one
common ingredient, which is the United States. And until the
countries, let's say Taiwan, Korea, Malaysia and Singapore, have
open skies agreements among themselves, the U.S. is really the
only beneficiary," he told the Straits Times.

"We hope that the next step will be open skies agreements
between the non-U.S. countries. And if you have open skies
bilaterals between every two of a group of countries, you may as
well have a multilateral open skies agreement further into the
future," Cheong added.

Tiny Singapore became the first Asian country to enter into an
open skies deal with the United States but analysts said this had
a limited impact because there is no domestic Singapore aviation
market.

There is some reluctance among larger countries in the region
because they fear being swamped by U.S. carriers in an open
competition.

In the interview, Cheong said SIA would step up efforts to
create new business overseas because profits are being squeezed
by the strong local dollar and rising costs.

SIA and the Tata Group of India are awaiting final approval of
their proposed joint venture to operate a second airline in
India, which has met opposition in New Delhi.

"The truth of the matter is officially we have still not
received a 'yes' or a 'no' from the official quarters. We will
let our partners the Tatas toil away at getting the approval,"
Cheong said.

Cheong declined to comment on recent speculation of a possible
deal with Indonesia's domestic carrier Sempati Air.

SIA, reputed to be the world's most profitable airlines,
reported net profits of 1.025 billion Singapore dollars (US$732
million) on turnover of 6. 89 billion dollars in the fiscal year
to March 1996.

Because much of the airline's revenue is in foreign
currencies, incomes are reduced when converted into the solid
Singapore dollar, which hardly moves from the rate of 1.4 to the
U.S dollar.

SIA, Singapore's biggest private employer with close to 28,000
people in its payroll, will explore further ways of using new
technology to reduce the role of manual labor, including direct
sales on the Internet global computer network by mid-1997, Cheong
said.

SIA has already shifted some of its accounting work to China
and computer software development to India.

Cheong reiterated SIA's desire to buy "super jumbo" aircraft
to meet the booming passenger and cargo needs of the 21st
century.

Europe's Airbus Industrie became the sole developer of such
aircraft, capable of ferrying over 550 passengers, when Boeing
Co. of the United States recently announced it was dropping
efforts to develop a rival model.

Cheong said SIA was planning to sell six of its older Airbus
A310 jets, used mainly for regional routes, over the next 12
months.