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.