Singapore Airlines gains lucrative 'kangaroo' route

Singapore Airlines gains lucrative 'kangaroo' route

SINGAPORE (Reuter): Singapore Airlines (SIA) has gained an important toehold in the lucrative Australia to Europe "kangeroo" route with its new four-airline alliance, boosting its position against other linkups, analysts said yesterday.

Its agreement to tie up with Australia's Ansett, Ansett International and Air New Zealand would not overtake its nearest rivals but would place it in a more competitive position.

"It's positive for SIA because it strengthens their network in the southwest Asia-Pacific region," said Nua We Boon, analyst with Fraser Securities.

SIA's alliance will pose a threat to the tie-up between Qantas and British Airways Plc on routes between Australia and Europe, they said.

It will also bolster its already extensive Asian operations as SIA will capture more passengers from Australia, filtering them into a market where it has an existing stronghold.

The alliance, described by the carriers as the largest in the Asia-Pacific, includes code-sharing, joint purchasing, joint marketing and cargo operations.

SIA, which flies to the major cities in Australia and New Zealand, will have access to new domestic destinations.

But all the airlines would benefit from the linkup in terms of being able to offer more comprehensive packages, the analysts said.

They said airline operations on such major passenger routes helped trim operating costs and offered freer access to previously shut domestic routes.

"All this just means that it will help per unit costs," said Lai Yeu Huan, an aviation analyst with J.M. Sassoon.

But he said the alliance was a defensive move to counteract the stranglehold on the kangeroo route by British Airways and Qantas, arguably entrenched in pole position.