ID :
186983
Tue, 06/07/2011 - 14:04
Auther :

Virgin snares Singapore Air as partner


Virgin Australia has secured aviation powerhouse Singapore Airlines (SIA) as its Asian partner, the latest sortie in its battle to win lucrative business travellers from rival Qantas.
Chief executive John Borghetti says the deal will help the recently rebranded carrier attract more corporate travellers via a vastly expanded international network.
The proposed long-term alliance, if approved, would see the two carriers codeshare on each other's flights and work together on schedules, routes and pricing.
Mr Borghetti has spent more than a year forging alliances with overseas airlines to create a network capable of challenging national flag carrier Qantas Airways Ltd without spending billions on new aircraft.
"We believe that this alliance brings enormous customer benefits and enormous competitive benefits," he told reporters in Singapore on Tuesday.
"It will really gives us over 400 destinations globally, when we add up every alliance.
"We then are able to compete much more vigorously with other large players in our home market."
Mr Borghetti said this latest tie-up brought Virgin's search for strategic alliances to an end.
It follows partnerships with Abu Dhabi-headquartered Etihad Airways, Air New Zealand and Delta Airlines.
The SIA partnership gives Virgin access to about 70 destinations, including 10 ports in India and eight in China, two of the world's fastest-growing aviation markets.
The planned deal was announced on the sidelines of the International Air Transport Association (IATA) annual general meeting in Singapore on Tuesday.
Mr Borghetti said the deal was a key plank in Virgin's bid to double its share the corporate travel market, dominated by Qantas, from about 10 per cent to 20 per cent.
For SIA's part, the deal provides access to about 30 destinations on Virgin's network and the ability to access feed traffic from Virgin's domestic flights onto its services out of Australia into Singapore and beyond.
Analysts expect the move will put even more pressure on Qantas.
They point to the combination of a strong international offering, now including one of the world's most highly regarded premium airlines, alongside a rebranded domestic operation that recently introduced business class.
Etihad Airways chief executive James Hogan said Virgin now presented a attractive case for corporate travellers and frequent flyers.
"I think it strengthens his corporate proposition ex-Australia, which is important," he said.
"In fact, it is a stronger corporate proposition now than the national carrier."
The Flying Kangaroo's international operations were losing money and were unlikely to grow until its financial performance improved, Qantas chief executive Alan Joyce said in Singapore on Monday.
SIA chief executive Goh Choon Phong said the alliance made perfect sense, given the airline's 40-year association with Australia, with Sydney the first flight for the airline's A380 services.
He said the two carriers may even work closer down the track on a joint-venture on specific routes.
"Both John (Borghetti) and I are of the mindset that this is long term. This is strategic and for it to work it has to be win-win," Mr Goh said.
"What we do together going forward, subject to, of course, the regulatory approval, will be something that is best for the alliance."
The regulatory process was expected to run until the end of 2011.
Virgin shares closed up one cent at 29.5 cents, while Qantas finished down 2.5 cents at $1.93.
Qantas says it isn't troubled by Virgin's move, pointing out the Flying Kangaroo already has a strong network of alliance partners.
"We have had for many years, including with British Airways," spokeswoman Olivia Wirth said.
* The reporter travelled to Singapore courtesy of IATA.


X