So, Qantas is going into the low cost airline business in Singapore: an interesting move, given that its Jetstar operation within Australia is yet to fly. Its Australian Airlines business, based in Cairns, is slowly growing, so the airline obviously thinks the rash of new airlines in Asia is an opportunity for it, sooner rather than later.

But in doing so, Qantas will be taking on Singapore Airlines in its own backyard, plus a clutch of start-ups, including AirAsia, which is the most successful value airline so far in the region and the one Qantas was rumoured, probably by fee-hungry investment bankers, to be interested in taking a stake.

Qantas is not stupid as its most important shareholder will be the Singapore Government’s Temasek Holdings, not the two local businessmen mentioned in the press handout. The Qantas press release is curiously shy on details of just who controls Temasek. It is linked to the Singapore General Investment Corporation, which directs the investment flows from the country’s billions of dollars of state pension and other investment funds.Temasek is its extension into the private Singapore business community.

If Qantas had any questions about Temasek, they could drop around to the Singapore office of Brierley Investments. Remember them? At one stage they were a big deal in Australia and New Zealand, especially as the major shareholder in Air New Zealand. Temasek was a big shareholder in Brierley and in BIL’s London hotels business, Thistle, an underperforming investment if ever there was one. Now that Brierley is but a shell of its former glamorous self, head office was uprooted from Kiwiland and moved to Singapore, under the close eye of Temasek.

The Qantas statement says the new airline will use either Boeing 737-300’s or Airbus A-320’s. Well I’d bet on the Airbus seeing how when Qantas announced last week the purchase of five being Boeing 737s, it was mentioned in several stories that these would replace the Airbus A320s, which would be heading for international routes.

That way Qantas reverts back to the operating efficiencies of an all Boeing fleet for its non-Jetstar domestic airlines, plus Australian Airlines and International until the new 380 aircraft arrive in four or five years time. Qantas will own 49.9 per cent of the new Singapore airline, which will only operate in Asia. The two local businessmen will own 21.1 per cent between them and Temasek will have 19 per cent.

Singapore reports describe Temasek as Singapore’s investment holding company and up till earlier this year was highly secretive. But now says it will make its annual report public for the first time in its 30-year history ahead of a foreign curreny bond offering later this year, expected to be around $US3 billion.

Temasek has traditionally kept its performance and strategies under wraps but it dominates Singapore business like no other company in Western economies. It holds dominant stakes in banking giant DBS, Singapore Airlines, Optus owner SingTel, shipping, ports, technology stocks, utilities and a large portfolio of property, including the Park Hyatt in Melbourne and the ANA in Sydney.

Besides Brierley, Temasek has interests in the Australian power industry, food companies and rural land, CBD property and had billions in listed companies in the stockmarket.

Its at the heart of Singapore Inc and its executive director is a woman called Madame Ho Ching who is also wife of Lee Hsien Yang, one of the sons of Lee Kwan Yew, the former PM of Singapore and still the most powerful man in the country. Lee Hien is head of SingTel, which controls Optus.

Madame Ho has driven much of the change in Temasek, including selling stakes in local business, moving more offshore to India, Indonesia, South Korea and Australia, and pushed for greater transparency and access to foreign capital markets.

So with Temasek onboard, Qantas’ move into Singapore has the blessing of the Government and more importantly, the Lee family And while the new airline has to get a Singapore air operating certification, the new start-up is not expected to have any hiccups and will start operations later in the year.

And Qantas still actively lobbies to keep Singapore out of Australia, to the point of pushing the Federal Government to say no to SIA’s ambitions to fly Singapore-Australia-US West Coast. Its a bit rich but Geoff Dixon is a master at this sort of specal interest pleading and remember that Qantas chairman, Margaret Jackson still puts a twinkle in John Howard’s eye. She’s his kind of business leader.

Of course John Howard and his Trade parrot, Mark Vaille will trumpet this as some sort of big deal under the free trade agreement between Australia and Singapore, but why does his government still make it very hard for Singapore Airlines to have the same sort of access into Australia that Qantas does into Singapore? Singapore Airlines, thanks largely to Ansett’s collapse, lost close to $1 billion in its ambitions to control Air New Zealand, so its gone a little cold on this part of the world.

But it still has a something of a interest. Remember the 49 per cent stake it holds in Dickie Brandson’s Virgin Atlantic. Well one of the perks of that is control over the international use of the Virgin name in aviation. Hence the difficulty Virgin Blue had with its new Trans Tasman business under the Pacific Blue moniker.