Singapore Airlines (SIA) and Virgin Australia yesterday announced a long-term partnership that will boost their global reach despite the exclusion of the lucrative Australia-US sector.
“The alliance will connect Singapore Airlines’ extensive international network with Virgin Australia’s wide range of Australian and Pacific destinations,” the carriers said in a joint statement.
They will share flights, coordinate schedules and undertake joint sales and marketing programs.
The tie-up, announced on the sidelines of a global aviation industry conference in Singapore, will take effect on Aug. 1 if approved by regulators.
The deal has one notable exclusion — the highly competitive trans-Pacific routes from Australia to the US West Coast that SIA has so far been denied by the Australian government.
However, the two airlines said they were confident the alliance would boost their revenues significantly.
“We don’t have a specific figure right now, but as you can see, the value proposition speaks for itself,” SIA chief executive Goh Choon Phong (吳俊鵬) told a news conference. “You can see the potential is really quite immense, both currently as we cooperate and going forward.”
Goh hopes the tie-up will boost SIA’s chances of eventually convincing Canberra to allow the Singapore carrier access to the trans-Pacific routes.
The move is the second major business announcement by SIA, one of the world’s most profitable carriers, in two weeks.
On May 25, it said it would create a long-haul budget airline to tap growing Asian demand for no-frills travel to places like Europe, but details have not yet been unveiled.
Through the new tie-up, Virgin Australia will have access to about 70 more destinations, while SIA customers will have access to about 30 extra routes, the statement said.
At yesterday’s news conference, Goh said SIA was still open to offers for its 49 percent stake in British carrier Virgin Atlantic.
The Singapore carrier paid ￡600 million (US$981 million at current rates) in 1999 for a 49 percent stake in Virgin Atlantic, which was started by British tycoon Richard Branson in 1984.
SIA has said its investment in the British carrier was not producing the sort of returns it was expecting. Branson has a 26 percent stake in Virgin Australia, a company spokeswoman said.
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