Virgin Australia seeks partnership with Singapore Air
Virgin dumps Malaysia Air, woos Singapore Airlines
Jun 29, 2011
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.