MAS-Qantas Alliance should be supported

The name of the game in the airlines industry is now mergers. The latest to join the bandwagon is British Airways (BA) and Australia's Qantas Airways Ltd. Apart from Qantas, BA is also talking to American Airlines and Spain's Iberia Airlines. Delta Airlines has taken over Northwest Airlines while RyanAir is making a second attempt for Aer Lingus.

Mergers in the airline industry were rare some four years ago because such exercises were plagued with failures. Early mergers such as Ozark Airlines with Trans World Airlines Inc in the 1980s and Continental Airlines with United Airlines lately, failed because a bigger entity did not translate to a better bottom line.

That's because the merging entities had to overcome mine-fields ranging from unions and pilots to regulators and politicians. Governments, in particular, are sensitive over ownership issues, particularly if it involved foreign airlines. This is why mergers amongst airlines normally happen when the entities are within the same continent.

Even mergers of airlines within the same continent are plagued with cost issues because cutting capacity and manpower layoffs are tough decisions to make.

But the merger between KLM Royal Dutch Airlines and Air France that was completed in 2004 proved that a merger may not necessarily be bad. The merger was structured in such a way that both airlines kept their identity and listing status. In terms of shareholders, Air France has the upper hand but KLM has veto rights.

The Air France-KLM merger proved to be an eye-opener to the sceptics. Its profitability increased and the merged entity increased its workforce instead of shedding staff and it has also expanded its network.

That has been the strongest point which Qantas has put forward in its bid to drive mergers between airlines in the region. It's understandable as the unions in Australia are among the strongest.

But the biggest problem for mergers between airlines in this part of the world is governments, especially if it involves national airlines. Governments erect a fence of protectionism when the mere mention of merger or takeover crops up. Ownership is a sensitive issue, which is why national carriers such as Singapore Airlines have failed in their attempt to take over the likes of Ansett Australia and China Eastern.

Even developed nations such as Australia have regulations whereby Qantas has to be majority-owned by Australians.

The get out of this obstacle, the head honchos of airlines and merchant bankers are piecing together a structure that involves an arrangement that is close to a merger but not a full-fledged merger.

A full-fledged merger would mean amalgamation of shareholders and operations. Also, a single listed entity and new a new identity. But that is not what the Air France-KLM model was about. The identities of the two airlines and their listing status were maintained.

What is being looked at in the Qantas-BA merger - termed as a merger of equals - are share swaps and overlapping boards of directors. Both entities are also to keep their listing status. By having overlapping boards, it means some directors of BA will be on the Qantas board and vice versa.

What Malaysia Airlines System Bhd (MAS) and Qantas are talking about is a collaboration that is almost close to a merger but does not involve equity. They are talking about overlapping boards that would enable the operations of both entities to head in the same direction. They are talking about juggling with a bigger seat inventory, cross-selling tickets and enlarging networks and reach. The identity and social obligations of both airlines remain distinct. There is no threat of either losing its identity or rights to fulfil the aspirations set by the respective airlines. It's hard to believe that such a model can be worked out but work is underway to make it work. Many would be surprised by an arrangement that falls short of merger between MAS and Qantas. After all, Qantas is a much bigger entity and is in talks with big boys such as BA.

But the reason Qantas wants to do a deal with an Asian carrier is to increase market share and profitablity. And this is not at the expense if its partner, which is MAS in this case.

What's telling in this collaboration is that there are no causes pushing both parties to the table. Both Qantas and MAS are profitable even in this intense period for the airline industry. They are both talking not about their survival today but for tomorrow and the future. Don't forget-competitors are also out there to pounce on the opportunity.

The least the shareholders and regulators could and should do is to assist in whatever way they can.

In the case of MAS, Khazanah Nasional Bhd and the Ministry of Finance should do all they can to facilitate the collaboration. There should not be any feet dragging over the matter. A decision should be made quickly. The last thing we want is a repeat of the fiasco involving the Proton-Volkswagen deal. Delays and delays finally landed Proton nowhere.

Air Asia X launched KL-London flight

Tiger ready to pounce in freer skies

The Kuala Lumpur-Singapore traffic could increase to the extent of challenging the likes of Sydney-Melbourne and Barcelona-Madrid routes

THE liberalisation of the Kuala Lumpur-Singapore sector could see it becoming one of the world's busiest air routes alongside Sydney-Melbourne and Barcelona-Madrid. Tiger Aviation Pte Ltd group chief executive officer and president Tony Davis said the entry of more players could see the Kuala Lumpur-Singapore traffic increasing to the extent that it rivals the likes of trunk routes like Sydney-Melbourne. "Its development was restricted before due to the monopoly by Singapore Airlines (SIA) and Malaysia Airlines, but now it could enter the top 10 ranking of global markets," he said.
In September last year, Barcelona-Madrid was cited the world's busiest air passenger route with 971 flights a week. Other high-density routes include Sydney-Melbourne. Davis said the Kuala Lumpur-Singapore route was important for Tiger Airways as it expected travel between the two countries to accelerate. "The route will remain profitable (to Tiger Airways)," he said. Tiger Airways, a budget carrier 49 per cent owned by SIA, is increasing its daily frequencies to five times a day from this month. It will mount flights next to Kota Kinabalu from Singapore in March next year, after launching its Singapore-Kuching flights last month. "We are getting more and more requests to fly to Peninsular Malaysia, in particular Penang, and we definitely see potential there (in Malaysia)," Davis said.
He added that Malaysia stood to benefit from the current problems in Thailand as travellers, put off by the situation in that country, might well opt to holiday in neighbouring destinations instead. On Tiger Airways' network expansion, Davis said it would push ahead with plans to increase capacity. It is eyeing 40-60 per cent capacity growth next year. Tiger Aviation announced last week group profit of S$9.9 million (RM24 million) for the financial year ended March 31 2008. As an unlisted entity, Tiger Aviation does not need to reveal its profit numbers. Tiger Aviation posted 59 per cent gross revenue growth in the quarter ended September 30 2008. The number of passengers it carried was 58.8 per cent higher, while capacity rose 61.8 per cent. Other Tiger Aviation Group shareholders include Indigo Partners LLC (24 per cent stake), the investment firm founded by Bill Franke; Irelandia Investments Ltd (16 per cent), the private investment arm of Tony Ryan and family; and Temasek Holdings Pte Ltd (11 per cent).

Daily KL-S’pore flights soar

From yesterday, air travellers on the Kuala Lumpur-Singapore route can choose 14 daily flights from low-cost carriers and more than 15 from full-service carriers.
This is a huge jump in choices from a year ago, which saw only Malaysia Airlines and Singapore Airlines plying the route. In February, low-cost carriers had begun launching limited flights. But from Dec 1, all airlines in Malaysia and Singapore can launch flights between the two capital cities. The change has come a month ahead of the liberalisation of the Asean Open Skies for capital cities.
Both AirAsia and Tiger Airways, which are flying seven and three to four flights respectively on the route, are eager to increase the frequencies. AirAsia Bhd group chief executive officer Datuk Tony Fernandes said yesterday that he wanted to add an additional flight by next month when the airline took delivery of more aircraft. “My target is to have 12 daily flights for stage one. Eventually we would like to have 24 flights daily or every half-hourly flight,’’ he said. The response had been “fantastic’’ for the KL-Singapore route even though it was just day one of the sector’s full liberalisation, he said. The budget airline sees its load factor averaging 75% on the route.
Tiger Airways chief executive Tony Davis said from Singapore that the carrier had seen huge demand for its flights and would increase its frequency to five daily flights from three or four now on weekdays. “Our loads are very good and we see strong consumer demand. We just saw our 3.30pm flight took off from Singapore to KL and there were only two empty seats out of the 180 seats in the aircraft,’’ Davis said.
National carrier MAS commercial director Datuk Abdul Rashid Khan, believes the Singapore-KL route has always been a springboard for connecting flights from KL International Airport (KLIA) to its global destinations such as outbound traffic from Singapore and likewise, for the return via KLIA. “We will continue to leverage on (our) partnerships to remain competitive as well as profitable on this route,’’ he said in an e-mail response.
An SIA spokesman, in an e-mail reply said the opening of the sector was good for consumers and the airlines. Competition would force airlines to be more cost effective and innovative in the product and service offerings, he added. “We offer competitive fares. The Singapore-KL route will now function like most other markets in the region. There will be price competition and fares will vary in line with demand,’’ the spokesman said.
MAS and AirAsia mount seven daily flights each on the route, SIA and SilkAir, four flights each, Tiger, three or four flights and JetStar, three. Malaysia’s Firefly is still hoping to ply the route from Subang and is still awaiting the Government’s response, according to managing director Eddy Leong.

Boeing 747 - The Big Survivor

Approaching its fourth decade in service, the 747 has grown to carry 467 passengers in three classes
In its more than 40-year history, the Boeing 747 has been able to grow and adapt to virtually every market condition, surviving and thriving in the expansions and contractions of an industry known for its powerful peaks and often painful valleys. The jumbo jet's potential to grow over the years has been the key to its success with more than 1,500 aircraft ordered since Juan Trippe and Pan American Airways launched the aircraft in 1966.
The basic configuration of the 747 has served Boeing extremely well during its first 42 years of service. Without increasing the length or cross section of the 70.6m (232ft)-long aircraft, Boeing was able to increase the three-class passenger capacity by 50 seats and its two-class capacity by 72 seats from its original design over the years.

The 747-400, which was launched in 1985 and first delivered in 1989 pushed the 747's range to 13,450km (7,260nm) with a redesigned wing and a choice of three new engine types from Rolls-Royce, General Electric and Pratt & Whitney. The 747-400 family eventually grew to six different variants, two cargo and four passenger aircraft for different missions.
Over its life, the maximum take-off weight of the aircraft has been increased 24% from Boeing's original Spirit of Everett 747-100 to the 747-400ER to 415,000kg (910,000lb).
When Airbus began offering the A380 in 2001, orders for Boeing's largest offering slowed considerably. The final passenger 747-400 was ordered in November 2002 by Taiwan's China Airlines and delivered in April 2005. Even before the final order for the 747-400 family was received in 2006 for two 747-400ERFs for LoadAir Cargo, Boeing launched its fifth-generation 747.
The two variants, designated the 747-8 intercontinental and freighter, have received 105 orders to date. Seventy-eight of those are for the 747-8 freighters and the remainder are for the passenger intercontinental variant, divided between 20 for Lufthansa, the only airline customer for the type, and seven custom- configured Boeing 747 Business Jets.
The 747-8 is 5.6m longer than its predecessor the 747-400 and represents the first stretch of the 747 fuselage since the aircraft was launched. Boeing has found significant success with the 747-8 freighter, which promises a fully loaded range of 8,185km and 16% lower tonne-kilometre costs.

This success, in part, was due to Airbus's struggle to get A380 production up and running. Airbus was forced to divert engineering attention away from development of the freighter variant. As a result, the four previous A380F customers Emirates Skycargo, FedEx, International Lease Finance and UPS have cancelled their 27 orders.
Even Airbus chief salesman John Leahy, who has conceded 100% of the largest cargo aircraft market share to Boeing, says that the 747-8 makes an "acceptable" freighter, perhaps the highest of compliments coming from Boeing's chief competitor.

Boeing's three-class 467-seat 747-8I aircraft has struggled to gain its footing in the market, even with performance expectations of an 14,815km range and 16% improvement in fuel burn on a per-passenger basis over the 747-400 and 11% better than the A380 per passenger.
Boeing lost one of its key sales battles last year when British Airways selected the A380 and 787 Dreamliner for its long-range fleet, shunning the new 747 design.
The closest Boeing has come to booking an order for the 747-8I since Lufthansa announced its launch of the type in December 2006 was a public announcement of the signing of a letter of intent by Nigeria's fledgling Arik Air for three aircraft in May of this year.
Through the first half of 2008, Airbus and Boeing have shared the struggle to sell their largest aircraft. Both airframers have sold just five aircraft in this category since January. Airbus sold three A380-800s to Korean Airlines and Boeing two 747-8 intercontinental aircraft to private operators.
Orders for the largest passenger offerings from both Airbus and Boeing in 2008 illustrate the challenges of selling aircraft on the downside of the cycle.
To date, Airbus has garnered 192 orders for the A380 to Boeing's 105 for the 747-8.
Yet today, every calculation in commercial air transport begins and ends with the cost of oil. Overall market receptiveness to large passenger aircraft has been tepid as of late, somewhat attributable to an unchangeable fact that four engines burning fuel is less attractive compared with an aircraft with half as many. With airlines trending towards cutting capacity and long range point-to-point routing, the twin-engined A350 XWB and longer-range 777s have been the beneficiaries.
The high cost of oil has inflicted significant damage on the industry already with falling profits making large aircraft orders increasingly difficult for both Airbus and Boeing.
Customer Outlook
Even so, Richard Aboulafia, vice-president of analysis for the Teal Group, has identified four Asian airlines that could be potential customers for the 747-8. Japan's All Nippon Airways and Japan Airlines, Hong Kong based Cathay Pacific Airways and South Korea's Asiana Airlines are all seen as customers weighing an A380/747-8 order.
All have been reliable 747 customers and, according to Flight's ACAS database, represent a combined total of 62 747-400s, about 14% of the total -400s delivered by Boeing during its production run.
Of the four airlines, Asiana appears closest to a decision on a widebody aircraft order, which according to sources, is expected to be announced at the Farnborough air show. Though that order is likely to address A350 and/or 787 purchases, not large aircraft which is more likely to come in the second half of the year.
ANA, JAL and Cathay Pacific are all operators of Boeing's hot-selling 365-seat 777-300ER that are being used to replace older 747-400 aircraft.
ANA is a prime target for Airbus to break into the largely unreceptive Japanese market. Following delays in the 787 Dreamliner programme and the schedule uncertainty for the 787-3 short-range variant, Airbus believes it could have leverage with the airline to offer the A380 as a 747-400 replacement to grow capacity. The airline has said it plans to retire its 747-400 fleet by 2012, leaving the 777-300ER as the largest aircraft in its fleet. ANA had initially indicated it did not see a role for the A380 in its fleet, but is likely to consider the ultra-large aircraft in its planning.
Leahy said in February that "we have not received ANA's request for proposals yet, but when we do, we will be offering the A380".
For JAL, the world's largest 747 operator, purchase of the 747-8 could present advantages over the A380. For example, ease of crew transitioning between older and newer 747 models and potential technical commonality between the General Electric GEnx-1B64 engines selected for its 787 Dreamliners and the GEnx-2B67 engines offered on the 747-8.
Cathay Pacific, which has a fleet of 24 747-400s and is leaning heavily on newly delivered 777-300ERs, has said the airline is in no hurry to make a decision on the A380 or 747-8I.

General manager purchasing and aircraft trading for Cathay Pacific Greg Hughes said in August 2007 that "we will continue to evaluate larger aircraft such as the A380 and 748 Intercontinental, but as we have a large fleet of Boeing 747-400s, which will be with us for some years, we feel no need to make a decision on the large aircraft at this time."
Cathay Pacific has already ordered 10 747-8 freighters. In addition, the airline recently issued a profit warning cautioning that financial results would be "materially and adversely affected by the high price of jet fuel, with the average price paid by Cathay Pacific in the first half of 2008 60% above that paid in the first half of 2007".

Boeing's launch of the 747-8 programme presented a strategic opportunity for the air framer to get maximum return on a modest investment. Development costs for the derivative aircraft have been estimated at around $1 billion, a small sum compared with the estimated $18 billion invested by Airbus to develop the A380.
With a backlog of 105 orders for the 747-8 programme, it is likely that Boeing has recouped its initial investment even if it offered significant discounts to customers. The list prices for the 747-8 range from $285 million to $300 million depending on the passenger or freighter variant.
For Airbus, which has historically been reliant on cashflow rather than overall profitability, the loss of each A380 order to passenger and freighter 747-8s means an unrealised revenue opportunity that could be as high as $337.5 million for each aircraft.
In the late 1960s, as design work for the original 747 was rolling along, the programme struggled for engineering resources that were devoted to its flagship programme at the time, the supersonic transport Boeing 2707.
The government-funded 2707 held Boeing's focus pulling key engineering resources away from the company's other new programme at the time, the 747.
The SST's budget was eventually cut by the US Congress in 1971 after the 747-100 had already entered revenue service with Pan American Airways. With its roll-out expected almost exactly 40 years to the day since its trailblazing predecessor took to the skies, the 747-8 is facing a similar battle for engineering resources with the company's flagship 787 Dreamliner programme. Assembly for the first 747-8 is set to begin in August and Boeing expects to have 90% of the engineering designs released by then in time to begin full final assembly operations in the early part of 2009.
As the 787 programme finds its footing, previously diverted 747-8 engineers are "trickling in" again, says one senior 747 programme engineer.

Engineering work is continuing at a fever pitch and some staff are working significant overtime to ensure that the February roll-out and beginning of the flight-test programme does not slip.
Because of the diversion of engineering resources to assist in the recovery of the 787 programme, Boeing revamped its assembly schedule for the 747-8F, the first of the two new 747 variants to be flown and certified.
Boeing pushed the roll-out from November 2008 to February 2009. As a result, Boeing will be able to deliver all the remaining 747-400 family aircraft and transition its assembly line to a more lean set up to accommodate the two new larger 747s.
Although the 747-8 flight-test programme has been compressed by two to three months, the delivery date for the freighter has not changed and is still targeted for the third quarter of 2009 to Cargolux.
Although the passenger variant of the 747-8 may not be the sales success Boeing would hope, a senior programme engineer says that this fact is no concern for those working to design the aircraft. He says there has been no let- up: "We have a commitment to customers."

Asean Open Skies Policy

Challenging year shaping up for aviation industry

Competition is expected to heat up in the region’s aviation industry as airlines gear up for the opening of the sector in Asean capital cities by Jan 1 next year.
A hot route will be the once protected KL-Singapore where nearly 10 airlines are going to slug it out for a bigger share of the lucrative market.
“We do not expect a big bang for the opening of the Asean capital cities as it is already a vibrant air sector. The real excitement will be on the KL-Singapore route (where competition will be keener on the sector),’’ Standard & Poor’s Equity Research aviation analyst Vincent Ng said.
Although the KL-Singapore route has been open to limited competition since early this year, additional frequencies of up to 180 new weekly flights can be expected when it opens up earlier on Dec 1.
AirAsia, Jetstar, SilkAir and Tiger Airways are expected to join in the fray for passengers on the high-demand route.

The established carriers plying the route are Malaysia Airlines and Singapore Airlines.
Fares will come under pressure as the date draws nearer. Certainly, a very challenging year is shaping up for the aviation industry as the full impact of the global economic downturn spreads.
Liberalising the sector means Asean carriers can mount unlimited flights between the capital cities but bilateral arrangements will also need to be hammered out.
The opening of the KL-Singapore route is the first leg of the opening of the air sector in Asean which eventually leads up to a unified regional aviation market by 2015.
Even MAS’s new carrier, Firefly, is hoping to be part of the action.
It already flies to secondary airports in Thailand and Indonesia but what it is eyeing is a slice of the KL-Singapore market.
The carrier is hoping the Government will give it the rights to ply the Subang-Singapore route.
“Many of our customers are asking for it and for us it is about convenience and adding value to our offerings. Allowing us to fly the route will complete the network.
“We have submitted our application and remain hopeful of getting three to four daily flights on the Subang-Singapore route,’’ Firefly Sdn Bhd managing director Eddy Leong said.
While airlines are working out their strategies to take advantage of the Asean Open Skies policy for capital cities, Singapore has already made the first move.
It has launched the ViaSingapore.com website, a one-stop shop offering travellers “best” air-fare deals to go to Singapore and beyond.
It is a proactive step which enhances Changi’s attractiveness as an air hub with its extensive connectivity.
But more importantly, it shows Singapore is moving fast to become the gateway of Asean as the region’s aviation sector opens up.

Singapore Airshow 2008

Singapore’s Prime Minister, Lee Hsien Loong, officially opened the first Singapore Airshow on Tuesday 19th February. The new Airshow is located on a purpose-built 30 hectare site alongside Singapore’s renowned Changi Airport and features a 40,000 sq.m exhibition hall.
The inaugural show was held from 19 February to 24 February 2008, with the first four days reserved for trade visitors at the purpose-built New Changi Exhibition Centre in Changi. Besides the usual exhibits and static displays, the event saw the return of aerobatic flying displays put up by the Airbus A380, Black Knights of the Republic of Singapore Air Force and the Roulettes of the Royal Australian Air Force. Also held concurrently are several seminars and conferences, including the Singapore Airshow Aviation Leadership Summit, the Global Air Power Conference, the International Defence Procurement Conference, the C4I Asia Conference and the Global Space and Technology Convention. The static displays included several themed exhibition pavilions, including the Airport Pavilion and the Integrated Land Defence Pavilion. The ATW Airline Industry Achievement Awards was also held during the Airshow. I was at the show on 24th February.

Airbus A380 1st Anniversary

On 28 October 2008, the A380, flagship of the 21st century, celebrates the first anniversary of its entry into service. The first A380 was handed over to Singapore Airlines on 15th October 2007. Their new “Queen of the Skies” entered service on 25th October 2007 with a special charity flight between Singapore and Sydney. Since then the aircraft has also entered service with Emirates Airline and Qantas Airways. A total of nine aircraft have been delivered to date, with six in operation with Singapore Airlines, one with Qantas and two with Emirates who received their second new generation large aircraft yesterday.

To date, more than 700,000 passengers have flown on the world’s first full double-deck aircraft, which is now connecting four continents and flying on seven major international routes. A380s in service link Singapore with Sydney, London and Tokyo, Dubai with New York, and Sydney and Melbourne with Los Angeles.

Altogether the in-service fleet has recorded more than 15,000 revenue flight hours in more than 1,600 commercial flights, with a very high level of in-service reliability, setting new benchmarks in terms of performance, eco-efficiency and low operating costs. In addition to the unequalled levels of passenger comfort and quietness inside the spacious double-deck cabin, outside the A380 is also setting new industry-standards for the environment. Indeed, the in-service experience has shown that the A380 consumes 20 percent less fuel per seat than the previous largest aircraft, representing the lowest fuel burn of any large aircraft ever.

“Singapore Airlines is very pleased with the performance of the A380 in its first year of operations” said Chew Choon Seng, Singapore Airlines Chief Executive Officer. “ We are now flying six of them, linking Singapore with Sydney and Tokyo daily, and with London twice every day. The A380 has lived up to its promises and proven to be reliable and fuel efficient. Importantly it has been a hit with our customers who enjoy its spaciousness, quietness and comfort, as well as the new cabin products and features we introduced with it. Our crews enjoy working on the aircraft and the A380 has advanced the Airline’s reputation for services that other airlines talk about.”

Sheikh Ahmed bin Saeed Al-Maktoum, Emirates Chairman & Chief Executive said: "In addition to the lower impact on the environment, its new-generation engines and superb aerodynamic performance mean that the A380 not only complies with today's noise limits, it is also significantly quieter than any other large aircraft flying today and produces only half as much noise on take-off and landing as the former largest commercial aircraft. It is a perfect fit for Emirates' future eco-efficient fleet, and that is why we have ordered 58 of them."

Geoff Dixon, Qantas Chief Executive Officer said: “With a range of 15 200 km the A380 gives us huge benefits. The A380 is the ideal equipment to alleviate traffic congestion at busy airports, while coping with growth. It is a bigger aircraft, which is more efficient and better at handling frequencies on certain routes. This 21st Century flagship ticks a wide range of boxes for us.”

“Today is a special anniversary for Airbus,” said Airbus President and Chief Executive Officer Tom Enders. “It shows that with perseverance, hard work and close collaboration with airlines the A380 meets all its promised performance objectives. It brings real benefits to our customers as the aircraft’s efficiency and dispatch reliability is really unprecedented.”

To date, total orders and commitments for the A380 are 202 from 17 customers.

Airbus A380 Delivery to Qantas

First Airbus A380 delivered to Qantas 19 September 2008

An impressive light show culminated the formal delivery ceremony of Qantas' no. 1 A380 in Toulouse, France. The Australian airline will begin revenue service with its 21st century flagship aircraft in October.

Airbus today commemorated the handover of Qantas' first A380 with a dazzling light show held at the Airbus Delivery Centre in Toulouse, France. The Australian carrier becomes the third international airline to add Airbus' 21st century flagship to its fleet.

"There are few airlines in the world as qualified as Qantas to be aviation pioneers," said Airbus President and CEO Tom Enders, who spoke at the evening event. "Qantas uses its experience as one of the great trendsetters in world aviation to keep pushing the boundaries, and it was quite natural they would be the first to conclude a contract to buy the A380."

Qantas CEO Geoff Dixon praised the A380, calling it the most innovative, most functional and most intelligent aircraft in the sky. "We recognised the operational and economic advantages that the A380 could deliver long before they were rather dramatically illustrated by the escalating cost of fuel," said Dixon. "And we certainly knew that the A380 would give us the opportunity to reinvent our on-board product consistent with our tradition of being a very competent long-haul carrier."

To commemorate the formal handover, Enders presented Dixon with a limited-edition A380 pen, while Rolls-Royce Chairman Simon Robertson bestowed a laser etching of the Trent 900 engine encased in glass on a walnut base. "We at Rolls-Royce appreciate the opportunity once again to be an integral player in shaping the future success of Qantas, Australia's iconic carrier and one of the world's leading airlines," said Robertson, whose company supplies the Trent 900 engines that power Qantas' A380.

The evening's event concluded with a unique light show using the parked A380 as a backdrop, superimposing complex colour schemes, videos of the aircraft's production process and images of Australian landmarks on the aircraft's fuselage, wings and engines.

Following tonight's ceremony, the A380 was to depart Toulouse for Sydney, making an in-route stopover at Singapore. Qantas is scheduled to begin A380 commercial service in the second half of October, flying from Melbourne and Sydney to Los Angeles on the American west coast.

Malaysian Flip Flop

Can Malaysia please get on with it?

First, Kuala Lumpur announced that the Eurocopter EC725 Cougar would replace the country's ageing Sikorsky S-61 "Nuri" fleets. Now, after opposition politicians and Eurocopter's competitors cried foul, saying that the selection was made without proper trials and checks, Kuala Lumpur has decided to "postpone" the deal. On the surface, Prime Minister Abdullah Ahmad Badawi's reasons seem credible. After all, the country is badly affected by the ongoing global economic crisis and it needs all the money it has in its budget to help its citizens ride out the storm. Saying that the country would defer spending several hundred million to 2011, when Kuala Lumpur plans to revisit the tender, makes good political sense. Unfortunately, it makes little military sense. The fact remains that the country badly needs to replace the Nuris. Some of these helicopters have been flying for around 40 years and the Royal Malaysian Air Force desperately needs some new equipment. Various fatal accidents involving the type over the last few years attest to this. Malaysia's various armed services will suffer because of this postponement. This incident is just symptomatic of the country's apparently haphazard approach to defence procurements. Its services operate several different makes of aircraft - Sukhoi, MiG and Boeing fighters, BAE and Aermacchi trainers, Eurocopter, Sikorsky, and AgustaWestland helicopters, among other permutations. Many observers believe that this suggests a lack of proper planning, with the country spending more than necessary to upkeep different makes when it would be cheaper and operationally sounder to have similar aircraft. An economic crisis is a serious matter, and Kuala Lumpur has to draw up a list of projects that should be given priority in the current climate. Not including the country's defence needs in that, however, makes little sense. A long-overdue programme to replace 40-year-old military helicopters is just as important for the country, and Malaysia's armed forces should not have to wait for another three years before a decision is made.