Posts tagged Australia
Tune Hotels, Tony Fernandes’ effort to take the low cost flight model to accommodation, is moving into Australia with plans to open locations at all AirAsia flight destinations in the country. Its first location will open in central Melbourne in December 2012, which will be followed by hotels in Darwin, Perth and Gold Coast.
The chain operates nine hotels in Malaysia and has also opened locations in BalI and London. With a goal to have 100 locations by 2015, there are also plans to open more hotels in Indonesia, as well as several in Thailand and the Philippines.
The Sydney Morning Herald reports AirAsia does not currently fly to Sydney, Australia’s largest city, since the Malaysian government has blocked it from the route to protect its national carrier, Malaysia Airlines (MAS).
Tune Hotels works on the principle that hotel rooms can be booked like airline seats, with rooms going for as low as AU$5 (US$5.30) a night if booked well in advance. The chain’s rooms are somewhat small but feature ‘one-star beds’ and a ‘power shower’, which along with air conditioning were identified as a traveler’s most important needs. Like budget airlines, some less necessary standards become chargeable extras and TVs, wifi and refrigerators are a few more dollars extra per night.
Australia currently has only one low-cost hotel operator, Formule 1 (owned by France’s Accor) which has operated for two decades but with only moderate success.
source & article: Sydney Morning Herald
A very interesting week the Southeast Asian air travel industry, with some big news coming out of the International Air Transport Association (IATA) meeting in Singapore. Some highlights were:
Malaysia Airlines (MAS) will join the Oneworld Alliance, joining a network that spans 900 destinations in over 146 countries. Members of the alliance align their various policies and procedures and adopt common specifications in service, engineering and maintenance, also reducing costs through parts-sharing and bulk buying. MAS’ entry, which was sponsored by Australian national carrier Qantas, saw the share price rise 1.4% to RM1.44, its first increase in three trading sessions. The Oneworld Alliance also includes British Airways, Cathay Pacific, American Airlines and Japan Airlines.
Singapore Airlines and Virgin Australia announced a long-term partnership, giving each access to dozens more routes in the Asian/Australian/Pacific region and enabling frequent fliers to earn and redeem points for each other’s flights. Two quirks of the agreement were: (1) it must still be approved by regulators before going ahead; and (2) it excludes the lucrative Australia-US routes long coveted by SIA, but from which it has been blocked by the Australian government.
Meanwhile, Singapore’s international gateway Changi Airport announced its passenger traffic would surpass 50 million a year by 2014. It’s already serving 42 million at present, and officials said it would have reached the 50 million mark even sooner if not for the global financial crisis a couple of years ago. Low cost carriers supply 22% of Changi’s numbers, while traffic to and from destinations in Southeast Asia and Northeast Asia grew 18%, compared to the airport’s total traffic growth of 13% in 2009.
sources: Bloomberg, The Star, IATA, Yahoo! Singapore, AirportBusiness.com
Malaysians will pay less for imported goods, online shopping in foreign stores and may even start traveling overseas more thanks to the 13-year high value of their local currency, the ringgit (RM). It’s predicted that it will rise to RM2.90 or RM2.95 per US dollar in the coming months.
The Star reports, in interviews with travel agents, that the number of Malaysians choosing overseas destinations could increase by 10% over the coming year as purchasing power rises. They cautioned travel package deals would take a while to reflect the change, though, and the stronger ringgit could also see the number of travelers to Malaysia decrease. Others disagreed, saying Malaysia remained a relatively cheap destination for travelers from wealthier countries.
Australia is already experiencing this phenomenon, where its dollar at an unprecedented US$1.08 has seen money heading out of the country in travelers’ wallets and via online stores. Shoppers are finding it easier than ever to chase bargains overseas, even leading some brick and mortar retailers to cry foul and call (unsuccessfully) for extra taxes on online purchases.
Perhaps it was inevitable, given the precarious position of Australia’s current minority government — but this afternoon national Treasurer Wayne Swan issued a statement that he did not plan to approve the Singapore Exchange’s (SGX) merger/takeover of his country’s main stock exchange, the Australian Securities Exchange (ASX) on the grounds of national interest.
SGX’s US$8 billion offer needed Swan’s approval to proceed. While he noted that he hadn’t yet made a final decision, his statement to the Foreign Investment Review Board makes it clear the plan cannot succeed in its current form.
Swan’s party, the Australian Labor Party, holds only 72 of 150 seats in Australia’s federal parliament, and governs with the help of a handful of independents and minor party members who had expressed opposition to the takeover. As well as the Treasurer’s approval, the deal would also have required a change to Australian law to remove the ASX’s maximum 15% individual ownership restriction. Major opposition parties had also questioned the takeover, saying it would reduce the ASX to a branch office of a foreign exchange and result in most major trades taking place in Singapore.
Some have suggested the Treasurer favors a consolidation and is trying to obtain a more attractive deal for Australia, while the SGX says it will “consider appropriate responses”. While Australia’s exchange is larger, Singapore’s currently has a larger market cap and perhaps greater potential for growth in the short term. As well as a desire to compete against the larger Asian exchanges by merging, pride may be playing its part with each country eager to assert its status as a regional financial center. If this deal fails, both the SGX and ASX will be looking for alternative tie-ups and partnerships.
Australia’s international trade development agency Austrade is encouraging local firms to get involved in a series of major transport proposals across Asia. The region’s emerging big hitters have realized the importance of solid infrastructure to support their booming economies and logistical needs, especially airport expansion and roadway construction.
Among the projects Austrade has flagged for attention are Indonesia’s US$255 million Ngurah Rai Denpasar Bali International Airport expansion and accompanying expressway, due to open before the 2013 APEC Summit, new expressway and metro line projects in Vietnam, and development of numerous transport plans and policies for the Philippines. There’s also the $2.3 billion Phase 2 of Thailand’s Suvarnabhumi Airport improvement involving a third runway and new passenger terminals. As well as the Southeast Asian projects, giants China and India are also active in the infrastructure boom, with Beijing planning a second airport and India investigating dedicated freight rail corridors (DFCs) and over 70,000km of proposed new roadways.
Austrade’s Senior Export Adviser Stan Roche said Australian companies could offer their expertise in several areas, not only in design and engineering but also in finance advisory and expertise in dealing with public-private partnerships (PPP). There were also other opportunities in related fields like security systems and technology.
The Singapore Exchange (SGX) has sweetened its offer to Australia for the proposed acquisition of the Australian Securities Exchange (ASX), hoping to win the favor of reluctant politicians who must approve the deal in order for it to proceed. The offer, already a fairly generous US$8.3 billion, will now include a guarantee of equal Australian/Singaporean representation on the board of directors, with five each. Australia was previously given four seats. The total number of directors will also be reduced from 14 to 13, with the remaining positions given to independent directors.
The Australian government supports the deal but it does not hold a majority in either the lower or upper houses of the Australian Parliament. Both members of the opposition Liberal Party and the left-wing Australian Greens have expressed doubts or outright opposition to the merger, saying it is not in Australia’s interests. In return, exchange operators are making guarantees that key operations will remain in Australia.
If the deal is rejected, SGX and ASX could see themselves left behind as other major world stock exchanges line up to merge. The London Stock Exchange (LSE) and Toronto’s TMX exchange announced plans to join last week and Germany’s Deutsche Boerse is discussing links with the NYSE/Euronext.
source & article: The Star online
A contrast of angles today on the topic of ‘most globalized economies relative to GDP’: Malaysia’s Business Times opens with that country’s improvement from 33rd to 27th place on Ernst & Young’s Globalization Index, while Channel NewsAsia laments Singapore’s drop from first place to third.
The index gives the world’s top 60 economies scores out of 10 on issues such as trade openness, labor movement, exchange of ideas and technology, and capital flows. As tends to happen in these lists, versatile city-states and smaller countries ranked high with Hong Kong and Ireland taking the two top positions. Malaysia’s #27 ranking is respectable for a country its size, putting it a hair under Australia at #26 with the same aggregate score, and the United States at #28.
Malaysia’s best scores were on trade and capital movements, but lower on labor movements and exchange of ideas and technology. Singapore’s slip was also due to labor and technology issues, with slightly lower net migration and trade in R&D relative to GDP. Despite the different reception to the results, Ernst & Young has predicted that most countries on the list will continue to improve their overall scores between now and 2014, as emerging countries continue to shine and the global economic situation improves.
Think tank The Heritage Foundation and The Wall Street Journal have ranked Hong Kong first on their 2011 Index of World Economic Freedom for the 17th year in a row, based on criteria in 179 countries such as economic openness, trade, rule of law and efficiency of domestic regulators.
Close behind in second place was Singapore, while Australia and New Zealand came in third and fourth respectively. The report said that while the global average had increased since the 2010 report, regions like sub-Saharan Africa had shown the most improvement while economic freedoms had remained steady in Europe and actually slipped in North America.
Switzerland, Canada, Ireland, Denmark the USA and Bahrain made up the remainder of the top 10. Mainland China came in at 135th, and Cuba, Zimbabwe and North Korea were unsurprising finishers at the bottom.
source & article: AFP via Channel NewsAsia
Australian low-cost carrier JetStar is also looking forward to a bumper 2011 in Asia, with new direct services and an expected increase in Asian region tourism.
JetStar recently launched direct flights between Melbourne and Singapore, and will add direct Auckland-Singapore flights in March 2011. The airline says it is now the largest low-cost operation at Singapore’s Changi Airport and intends for its new routes to grow, with outbound tourism from Australia to Singapore and JetStar Asia’s 22 other destinations all increasing in the previous year.
The airline already flies eight Airbus A330 planes on its long haul routes and has ordered another three. It also hopes to attract more Asian tourists back to Australia as well, hinting at the possibility of a triangular service such as Singapore-Auckland-Melbourne at some stage in the future.
source & article: The Australian
Here is a series of anecdotes from Malaysia’s outgoing Trade Commissioner in Australia & New Zealand, Ong Yew Chee, on the popularity of Malaysian products in Australia and the new opportunities that exist for other Malaysian exporters there.
There was a 32.3% increase in Malaysian exports to Australia in Jan-Aug 2010, totaling RM16.8 billion (US$5.35 billion), while in the same period Australian exports to Malaysia actually fell 1.6% to RM6.3 billion ($2 billion). He gave the examples of Lingam sauce, Baba and Rahim brand food additives as exports which had gained a large following in Australian supermarkets and restaurants, while other products like furniture had also built a reputation for build quality and value.
Australia, being a large importer of goods due to its small local manufacturing base, represented a growing opportunity for Malaysian exporters looking for an overseas market. Even the current resources and mining boom presented an advantage for Malaysia, as Australian companies required building materials and household goods to support the industry and its remotely-located workers.
source & article: Bernama via The Edge Malaysia