Michael Pascoe writes:

Geoff Dixon’s Qantas doesn’t have a very
good track record so far on new airlines – one success from three – and the
reported Indonesian ambition
won’t be an easy way of getting the
success ratio up to 50%.

An aviation executive tells us the
Indonesian Government is not being very helpful to LCCs (low cost carriers)
that it perceives as threatening Garuda.

Garuda has problems, especially owing a
rather large debt repayment, and that has the government feeling rather
protective about the national flag.

There are reports that Qantas offshoot
Australian Airlines may not be long for the skies and Jetstar Asia continues to
struggle. The aviation type reckons another $50 million capital injection will
be required soon.

One of the early mistakes Qantas realised
it made with the Singapore-based Jetstar Asia (aside from not understanding
the perception of Singapore
in much of Asia) was not having control of its investment. The Roo would be doing that
again if it goes ahead with the suggested 20 or 30% stake in
Jakarta-based AdamAir.

Foreigners are not permitted to have
control of Indonesian airlines, which means any investor would want to have an
extremely close relationship with a very good local partner – or risk losing
money in a particularly risky game.

Peter Fray

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