Door Still Open On SIA Pacific Access

The Australian government has not shut the door permanently on a bid by Singapore Airlines to gain access to the lucrative Sydney-Los Angeles route, Australian Prime Minister John Howard said on Wednesday.

The government is considering granting Singapore Air access to Australia's trans-Pacific route as part of a review of aviation policy.

But confusion has surrounded the bid since comments last week by deputy Prime Minster John Anderson. He said on June 15 the time was not right for Singapore Air to be given access, but said the following day that access would be reconsidered in a few weeks.

"We have never at any stage said finally and definitely no to that," Howard told reporters on Wednesday.

"The idea that we have shut the door permanently... is not correct... The issue is certainly not going to be the subject of a decision in the next few weeks, but the whole question has not been finally taken off the table either."

Qantas and bankrupt US carrier United Airlines are the only two airlines offering direct flights from Australia to the mainland United States. Discount carrier Virgin Blue also wants access to the route.

Howard said he discussed the issue with Singaporean Prime Minister Lee Hsien Loong during a phone call a few weeks ago.

He said he told Lee the issue has to be considered within the context of broader aviation policy, "including the question of whether Singapore Airlines and Qantas were to remain as separate companies for an indefinite period of time".

The government aviation policy review, being led by Anderson, is due to be completed in a few weeks and may consider lifting a foreign ownership cap on Qantas, Australia's largest airline.

Trade Minister Mark Vaile signalled support for a removal of the foreign ownership cap when he told the Australian newspaper on Monday he would back a merger of Qantas and Singapore Air.

A spokesman for Singapore Airlines described the merger proposal as "interesting", while a spokeswoman for Qantas said there were no plans for a merger under consideration.

Qantas, which supports moves to allow consolidation in the airline industry, has repeatedly asked for increased foreign ownership to allow it greater access to foreign capital, but Howard's conservative government has so far resisted those calls.

(Reuters)