Inside the Qantas-Singapore Airlines merger that almost happened...

The Australian flag-carrier once sought to combine forces with Singapore Airlines, creating an Asia-Pacific colossus of aviation.

By David Flynn, September 6 2022
Inside the Qantas-Singapore Airlines merger that almost happened...

Qantas and Singapore Airlines are competitors of the first orders, but there was a time when both airlines almost merged to create a powerhouse of aviation.

That moment came in 2004, after British Airways offloaded its 18.25% cornerstone stake in Qantas.

The Flying Kangaroo began seeking a strategic partner closer to home – and following rebuffs from fellow Oneworld member Cathay Pacific, that gaze fell on Singapore Airline in a relationship which made sense for both airlines.

Qantas knew it needed a strong ally to sharpen its edge in an increasingly competitive market.

Singapore’s Changi Airport was already the popular stop-over for Qantas flights to London and Frankfurt, while the Singapore Airlines hub could offer Qantas travellers scores of other onwards connections around the globe. 

For its part, Singapore Airlines had long been Australia’s most popular international airline after Qantas itself (a ranking eclipsed by Emirates only after the Qantas-Emirates alliance took wing in 2013).

As Sydney Morning Herald journalist Matt O’Sullivan recounts in his book Mayday: How Warring Egos Forced Qantas Off Course, early 2005 saw Qantas’ three most senior executives – CEO Geoff Dixon, Chief Financial Officer Peter Gregg and Executive General Manager, John Borghetti – jetting to Singapore, and later Bangkok (to avoid ‘galley gossip’ by suspicious Qantas crew), ‘for secret meetings with their counterparts at Singapore Airlines.’

The billion-dollar play

The temporary truce between erstwhile rivals saw investment bankers diving headlong into each airline’s spreadsheets, and ‘the results were mind-blowing for both airline camps.’

‘A merged airline group could lead to billions of dollars of extra benefits that neither of them could achieve by flying solo,’ O’Sullivan details.

‘Under the plans, the airlines would form a fifty-fifty joint venture and merge their networks’, although each airline’s highly-recognisable brand would remain.

Behind-the-scenes lobbying ensured that both the Australian and Singaporean governments expressed tacit support for the merger.

But Qantas’ prior success in convincing the Australian government to block Singapore Airlines from flying between Australia and the USA, and its reluctance to shutter the recently-launched and Singapore-based budget airline Jetstar Asia, made bitter tea for the Singapore Airlines executives.

A marriage of unequals?

As O’Sullivan recounts, more turbulence lay ahead.

The market capitalisation of Singapore Airlines was larger than Qantas. ‘The Singaporeans felt, quite rightly, that they were getting the rough end of the deal from Qantas, which was pushing for a merger of equals – a fifty-fifty split.’

‘The structure of a merged airline also led to the important question of who would become chairman and chief executive.’

Qantas chief Geoff Dixon wanted to remain CEO of the merged airline, but to allay concerns of Australians and Singaporeans alike – who felt a deep sense of nationalistic pride and almost ownership of their respective flag-carriers – ‘the executives toyed with the idea of a dual board, each of which would have its own chairman.’

But talks stalled after less than six months, O’Sullivan writes.

‘A deal that would have strengthened Qantas immeasurably had slipped through the hands of its senior executives for a bunch of reasons – too much ego from the Australians topped the list.’

‘Neither side could agree on who would become chief executive of a merged airline group. The Singaporeans feared that Dixon, the wily Australian, would end up running one of their best-known companies.’

“The moment has probably passed,” Dixon reflected in October 2005. “There are moments in time, in all parts of your life, that sometimes things can happen and other times when they can’t.”

This didn’t spell the end to Singapore Airlines’ active interest in the Australian market.

1999 saw Singapore Airlines make a $500 million pitch for control of Ansett Australia in 1999 – which Air New Zealand countered with a $680 million knock-out bid, only to see the troubled Ansett collapse like a deck of cards two years later.

In 2001 came an audacious $250 million offer for the fledgling Virgin Blue, rejected in the most public of fashion when Richard Branson tore up a mock cheque at a hastily-convened press conference at Melbourne Airport.

The carrier then became a major stakeholder in Virgin Australia, with its 20% share among the largest controlled by a single entity, only to see its investment wiped out when Virgin collapsed into administration in April 2020 with debts of $6.8 billion, before being sold to Bain Capital in late 2021 with the slate largely wiped clean.

24 Aug 2011

Total posts 1205

I would have thought the time where a firm alliance between SQ and QF was in 1992 when Qantas was first privatised.  Singapore Airlines put forward a very strong bid to acquire the 20% trade sale component of the privatisation but these shares were sold by Paul Keating's government to British Airways even though it was rumoured its offer was slightly less than SQ's.  SQ was very disappointed at the time and felt the decision reeked of colonialism and was almost anti-Asian.

Etihad - Etihad Guest

21 Jul 2019

Total posts 165

I was in high school in 1992, but already an avgeek with years of regular travel under my belt; and I recall very clearly the strident and sharp anti-pommy feeling and rhetoric which was quite evident in the press! Lord knows how much worse it would've been if an Asian carrier had taken up the minority stake.....Looking back, I shudder at how puerile these supposed adults were. Have things changed thirty years later? On a personal note: I'm mighty glad the QF-SQ merger never took place.

Qantas - Qantas Frequent Flyer

09 Feb 2015

Total posts 377

I feel SQ will be circling an Australian airline again when Bain eventually sell off a percentage of Virgin. 

Qantas - Qantas Frequent Flyer

04 Nov 2017

Total posts 325

Perhaps 3rd time lucky after SQ's first two failures with Ansett (via a 25% stake in Ansett's owner Air New Zealand) and 2nd time being involved in the dysfunctional 'ownership circus' that was the now defunct Virgin Australia 1.0


11 Jul 2014

Total posts 951

It's all about bums on seats and now there is Qatar, Etihad and Singapore in the fight, in hindsight some airlines would be thinking they shouldn't have let Bain get control but on the flip side would VA be as lean and mean if Bain wasn't in control?

Qantas - Qantas Frequent Flyer

04 Nov 2017

Total posts 325

VA are replacing Etihad with Qatar on some codeshare flights, VA moving Etihad to a '2nd tier' partner, plus with Etihad moving away from equity investments, any chance of them getting involved with VA again financially would be even less than SQ, and chances of that would be very low in itself.

26 Mar 2020

Total posts 64

If Singapore Airlines had brought Ansett - it is likely Ansett would still be around today.

Singapore Airlines is a large airline with varied fleet and had the experience to take over an airline like Ansett - while Air NZ was a small airline with little experience in taking over Ansett which at the time was a fairly large operation

Qantas - Qantas Frequent Flyer

04 Nov 2017

Total posts 325

Let's not forget that Air New Zealand had the first refusal (veto) rights over the News Corp stake which they had acquired from TNT when they purchased the first 50% of AN from TNT a few years prior. 

Had the NZ board allowed SQ to purchase News Corp's 50% stake in AN back then, things would've been very different and NZ would've not been going to their government for assistance due to them being caught out by the prior Ansett troubles which occured during the TNT/News Corp era.

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