virgin v qantas according to rivkin, page-2

On the other hand........

This is from Abn-Amro's morning commentary:

"QAN: VERY IMPORTANT FOR QAN TRADERS TO READ. We’re without a QAN analyst right now, so my insights will have to do. Some rather bad news out o/n (and conversely a massive shot in the arm for Virgin Blue and indirectly, Pacific Blue). There have been some negotiations ongoing in Hong Kong between the UK and that Special Autonomous Zone to expand their air services agreement that finally came to fruition very late yesterday. Importance to QAN? Extremely. Virgin Atlantic has for years been trying to fly the Kangaroo route through Hong Kong and Cathay wanted to fly from London to the US. O/n, an agreement was reached that allowed unlimited number of flights between the UK and HK. Virgin Atlantic stated o/n that they will commence flying the London-Oz route via Hong Kong from early 2H04. This is NOT good news for QAN. Why? They get almost ALL of their profit from international routes from the Syd-Lon, Syd-HK ,Syd-LA/East Coast and Syd-rest of Asia. In short, it will put pressure (to varying degrees) on ALL of these routes. The wild card here is Singapore Airlines. They’ve got a 49% stake in Virgin Atlantic. You might see some negotiations between Singa and Virgin since Singa would not necessarily want a price war between QAN and Virgin on the Syd-Lon route. Especially when there is a near duopoly between Singa and QAN on the Syd-Singa route (when’s the last time you flew an airline OTHER than Singa or QAN from Syd-Melb to Singa?) CAUTION here."