Singapore Airlines Ltd, the second-largest airline on international routes from Australia, is backing a new domestic carrier to compete with Qantas Airways Ltd, the Sunday Telegraph said.
A group of international investors backed by Singapore Air will underwrite an Australian domestic carrier that may begin flying on major routes as soon as December, the newspaper said.
The group asked Sydney Airports Corp, owners of the nation's busiest airport, to set aside space at the terminal of failed carrier Ansett Holdings Ltd, the report said.
Singapore Air would "not rule any proposal out at this stage," the newspaper cited an unnamed company spokesman as saying. The airline is "keeping its domestic options open."
Singapore Air has been keen to expand in Australia since last year's failure of Ansett, formerly Australia's No. 2 carrier, deprived it of a partner to offer domestic flights there. The Singapore carrier owned a quarter of Ansett's parent, Air New Zealand Ltd.
Last month Singapore Air Chairman Koh Boon-hwee said Asia's third-largest carrier was focused on improving profitability and adding new flights. Starting a new airline in Australia or taking a stake in one wasn't "on the radar screen," Koh said.
The domestic airline, which hasn't been named, will fly new Boeing Co and Airbus SAS jets, the newspaper said. It will employ as many as 1,000 people and will likely be based in Sydney, it said.
Sydney Airports is scheduled to consider the future of the vacant Ansett terminal on Friday. Virgin Blue Airlines Pty, which is trying to improve its 18 percent share of the Australian domestic market, is expected to move into the building, the Telegraph said. Qantas is also expected to take some space.
A new domestic carrier would need space in the terminal.
"We are sending a strong signal that while we might be able to get the planes and the passengers, you've got to have somewhere to park your plane," the newspaper cited the Singapore Air spokesman as saying.
An application to the Civil Aviation Safety Authority for an newspaper cited an unnamed industry official as saying.
"These guys are ready to go; they can be in the air by Christmas," it cited the person as saying.
Meanwhile, Qantas Airways Ltd, Australia's largest carrier, said it will buy four new Boeing Co 737-800 aircraft and take options for four more, increasing capacity in a domestic market it expects to grow.
The order is part of an agreement Qantas and Boeing announced last October.
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