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Keith T

Virgin Australia announces strategic alliance with Singapore Airlines

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Now I understand the rush to get MH into oneworld. :)

 

http://www.theaustralian.com.au/business/aviation/virgin-australia-inks-alliance-with-singapore-airlines/story-e6frg95x-1226070741209

 

QANTAS has suffered another blow after Singapore Airlines and Virgin Australia announced they were forming a long-term alliance today.

 

The proposed alliance will allow the airlines to codeshare on each other’s international and domestic flights and give them the ability to “earn and burn” points with each other’s frequent-flyer schemes.

 

They also want to co-ordinate schedules between Singapore and Australia and engage in joint sales, marketing and distribution.

 

A joint statement from SIA and Virgin said: “The alliance will connect Singapore Airlines’s extensive international network with Virgin Australia’s wide range of Australian and Pacific destinations.

 

“Through the Singapore Airlines network, Virgin Australia customers will have access to some 70 more destinations.

 

"Through the Virgin Australia network, Singapore Airlines customers will have access to some 30 more destinations.”

 

...

 

The move, coming just a day after Qantas announced it would team up with Malaysia Airlines, raises the prospect that Virgin could join the powerful Star Alliance.

 

Star has not had an Australian member since the collapse of Ansett in 2001.

 

As part of the agreement, the two airlines have agreed that the SIA customer will be able to 'interline' - using the same ticket on different airlines - through Virgin from August 1 and top-tier frequent flyers will have access to each other’s lounges.

 

Virgin's ASX announcement (ASX code VBA) also states that there will be reciprocal lounge access for Velocity Gold and KF EG members.

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This is the news that Qantas certainly does not need!

 

At the SIA-Virgin Australia media conference and signing ceremony, a new Straits Times reporter asked if this alliance was the result of yesterday's announcement of MAS' entry into oneworld .... hahahahahahahahahahahahahahaha

 

The synergy between SIA and VA is amazing and everyone attending the media event was convinced that this will present tremendous opportunities to both airlines. And there seems to be tremendous good chemistry between Goh Choon Phong and John Borghetti. While the Australia - USA transPacific route is not included in the code-share arrangement presented by this alliance, SIA hopes that this alliance will strengthen SIA's case for it.

 

SIA did not discount the possibility of operating to more Australian cities and VA did not discount the possibility of operating its own metal to Singapore. SIA also emphasised that this alliance will also include the network of SilkAir.

 

KC

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Well this alliance is really necessary to neutralise the MH/QF alliance in Australia. I think that it is good for the consumers too - competition improves the breed. :)

 

Congratulations to SQ/VA!

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MAS' membership in oneworld is not the reason for this partnership between SIA and Virgin Australia ... it sure is tough news for Qantas. MAS' value to oneworld is far broader than the Australian market and if it could strengthen its Southeast Asian network and ensure maximum connectivity between incoming longhaul flights into KUL and flights from KUL to the rest of SE Asia, it would have justified its role in oneworld.

 

This week has brought tremendous news for both SIA and MAS ... both are huge and positive surprises for me.

 

I also hope that MAS will paint one of its A380 in the oneworld livery - if MAS does it quickly enough, it might just be the first in the world to paint an A380 in alliance livery - any of the three alliances.

 

KC Sim

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Yes, of course - Oneworld alliance is more than just Australia and QF.

 

However, VA might be in the early stages of joining *A and this may be just a prelude of things to come.

 

Here is CAPA's take on the SQ/VA alliance: http://www.centreforaviation.com/news/2011/06/07/virgin-australia-and-singapore-airlines-to-change-the-balance-of-power-with-long-term-alliance/page1

 

Another step in Virgin Australia's relentless quest for the corporate client

The SIA partnership - which will extend to relatively intimate sharing of capacity and pricing - is a very big step in Mr Borghetti's highly focussed quest to wrest another 10% share from Qantas in the vital corporate market. SIA already has a substantial international market share but in combination the two carriers should be able to leverage their joint value beyond simply adding their respective levels. Qantas will undoubtedly see this as a greater challenge than Virgin' previous partnership moves (with Delta, Air New Zealand and Etihad), as SIA has long been the biggest thorn in the Australian flag carrier's side and will now gain effective access to a much larger Australian market, using Virgin Australia's metal.

 

But the untidy - and never dull - march of progress moves another jump with this move. By getting close to another Star Alliance partner, Virgin Australia necessarily increases speculation that it is moving closer to membership. This does not however appear at this stage to be Mr Borghetti's strategy, nor would it seem to be the best option to be committing to any one of the large groups, where such a move might curtail further opportunities at bilateral alliances.

 

Inevitably this is therefore just one more step in the unfolding story, not the end game, once again opening up myriad opportunities - and potential for conflict, as those partnerships threaten to overlap. Rumours abound that Etihad is considering joining oneworld; and in the torrent of activiity, Qantas' sponsorhip of Malaysia Airlines also promises to raise long term possibilities of dual hub operations for Qantas in southeast Asia. On top of speculation about a Qantas full service subsidiary in Singapore and an SIA long/medium haul low cost operation, today's announcement follows a very busy few weeks of strategy ping-pong.

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At the SIA-Virgin Australia media conference and signing ceremony, a new Straits Times reporter asked if this alliance was the result of yesterday's announcement of MAS' entry into oneworld .... hahahahahahahahahahahahahahaha

Hahaha indeed :lol:

Bear in mind though that for some, Malaysia and anything Malaysian is centre of universe :D

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Both Mr Borghetti and Mr Goh confirmed that the negotiations that culminated in today's announcement and signing of the long term alliance and partnership took 10 months. So to the New ST reporter - No, it could not have been hammered out in less than 24 hours after oneworld announced MAS' entry into the alliance.

 

Mr Peter Hartman, President and CEO of Air France - KLM confirmed that all partnership deals between them and MAS will remain effective. He said that AF-KLM was consulted and informed in advance on yesterday's announcement by oneworld.

 

KC Sim

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Both Mr Borghetti and Mr Goh confirmed that the negotiations that culminated in today's announcement and signing of the long term alliance and partnership took 10 months. So to the New ST reporter - No, it could not have been hammered out in less than 24 hours after oneworld announced MAS' entry into the alliance.

 

Mr Peter Hartman, President and CEO of Air France - KLM confirmed that all partnership deals between them and MAS will remain effective. He said that AF-KLM was consulted and informed in advance on yesterday's announcement by oneworld.

 

KC Sim

 

Yeah I was thinking that when SQ allowed VAust to use the Virgin brand outside Australia, they didn't allow it for nothing in return. Though John Borghetti is quick to can the idea that the 2 events are linked.

 

Cooperation between airlines from different alliances not uncommon. QF has a rather comprehensive codeshare agreement with AF for flights between Paris and Australia, much to the consternation of CX.

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Cooperation between airlines from different alliances not uncommon. QF has a rather comprehensive codeshare agreement with AF for flights between Paris and Australia, much to the consternation of CX.

 

And apparently MH, if the rumours are correct. The reason why AF blocked MH from Skyteam was because they don't want to lose that codeshare agreement.

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Air France's opposition to Malaysia Airlines membership in Skyteam dates way before they even had the Qantas codeshare.

 

KC Sim

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What goes around comes around, it's karma baby.

If the Skyteam rumour was true, it really hits them back on the head.

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The codeshare arrangement between Air France and Qantas is working so well ... I am not certain Qantas is going to jeopardise it just because MH is in oneworld. Only time will tell, but it will not simply be Qantas to decide if this codeshare with Air France carries on. Her customers who have grown accustomed to this arrangement will have a big say.

 

A lot still depends on whether Qantas launches flights to Kuala Lumpur ... if it does not, then Qantas passengers will have to fly to Singapore or Bangkok before transfering to a KUL-bound MH flight before connecting on a Europe-bound MH flight. Similar situation applies for MH and BA to harvest any potential synergy.

 

It remains for Malaysia to convince QF/JQ and BA to fly directly into KUL ... bearing in mind both QF and BA left because of yield shortfalls. If yield was a problem then, it is a bigger problem now - especially with staff and fuel cost escalating.

 

KC Sim

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Virgin to ditch Malaysia Airlines relationship for Singapore Airlines

June 28, 2011 - 4:32PM

Virgin Australia will seek to end its relationship with Malaysia Airlines (MAS) as it pursues a partnership with aviation powerhouse Singapore Airlines (SIA).

 

Virgin and SIA have lodged an application with the Australian Competition and Consumer Commission (ACCC) to form their alliance.

 

The pair wants ACCC approval to codeshare and cooperate on pricing, scheduling, marketing and sales on Australia-Singapore services and international and domestic connecting flights.

 

They also plan to bid for corporate and government travel contracts, and offer reciprocal benefits to members of their respective frequent flyer programs including lounge access and the ability to earn and burn points.

 

Virgin and SIA said they were looking at new routes, but specific city pairs were blanked out in the public version of their application.

 

They also said they would look at adding additional capacity and using larger aircraft on between Australia and Singapore.

 

The application also confirmed Virgin was looking to wind up its reciprocal frequent flyer and interline arrangements with the Kuala Lumpur-based MAS.

 

MAS announced earlier this month it would join the oneworld airline alliance and seek closer cooperation with national flag carrier Qantas Airways.

 

"Therefore there is no prospect of a broader relationship with Malaysia Airlines," the application said.

 

"As a result of both the proposed alliance and Malaysia Airlines' decision to join oneworld, both parties will discuss termination of their existing relationship."

 

Virgin and SIA said they would spend money improving IT, booking and check-in systems, and on product alignment and marketing.

 

They have asked for approval for an initial 10-year term to "ensure adequate time to achieve a return on that investment".

 

Virgin said the tie-up with Singapore Airlines complemented the airline group's partnership with Etihad Airways and other tie-ups chief executive John Borghetti has assembled to build a network of global destinations without spending hundreds of millions on new aircraft.

 

"For commercial reasons, Virgin Australia does not intend to codeshare on Singapore Airlines routes where it has codeshare coverage with Etihad," the application said.

 

This arrangement would extend to the Brisbane-Singapore-Abu Dhabi service, which Virgin was due to start flying from February 2012 and currently operated three times a week by Etihad.

 

"While the alliance will provide Virgin Australia with the ability to codeshare on Singapore Airlines services between Brisbane and Singapore, Virgin Australia has an existing codeshare with Etihad on this route," it said.

 

"Virgin Australia does not intend to codeshare with both airlines on this route."

 

SIA has 92 return services a week between Singapore and Australia.

 

http://www.smh.com.au/travel/travel-news/virgin-to-ditch-malaysia-airlines-relationship-for-singapore-airlines-20110628-1gorq.html

 

Maybe we'll see QF/MH JV/codeshare earlier than expected.

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SINGAPORE: Singapore Airlines (SIA) and Virgin Australia have launched the first phase of their alliance.

 

They have started an initial interline agreement and offered reciprocal lounge access to eligible customers.

 

Starting from August 1, SIA customers are able to connect to a range of Australian destinations served by Virgin Australia on one ticket, with terminal transfers, in-flight entertainment and meals included.

 

The two airlines announced plans for a wide-ranging partnership in June, including codesharing and seamless connections.

 

The two airlines said subject to regulatory approvals, customers should be able to experience the full benefits of the alliance from late this year.

 

- CNA/fa

 

http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1144271/1/.html

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Singapore: The proposed alliance between Singapore Airlines and Virgin Australia has been given the green light by the Australian Competition and Consumer Commission's (ACCC).

 

The approval means Singapore Airlines and Virgin Australia will be able to take the next step to build an integrated alliance, offering an expanded network and seamless service offerings for travellers.

 

"We are pleased with the ACCC's draft approval" said Singapore Airlines' Regional Vice-President for South West Pacific, Subhas Menon, adding that the partnership with Virgin Australia "will enable us to deliver a best-in-class travel experience across Australia."

 

"Today's announcement will be welcome news to leisure and corporate travellers alike who will benefit from the more attractive and competitive travel options this alliance will provide" said Menon in a statement.

 

Singapore Airlines and Virgin Australia lodged an application with the ACCC in June under which the two airlines proposed to codeshare each other's international and domestic flights, coordinate schedules between Singapore and Australia and beyond for seamless connections, engage in joint sales, marketing and distribution activities as well as offer reciprocal frequent flyer programme benefits.

 

 

http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1159060/1/.html

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I wonder when the current arrangement between VA and MH will end?

And when will we start seeing new OneWorld partner arrangements with MH?

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And when will we start seeing new OneWorld partner arrangements with MH?

No one in their right mind will venture into anything to do with MH unless and until such time they decide to come clean on what intentions are with regards to MH, FY, Saphire, MASwings etc etc :)

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