SIA and Virgin enter alliance

SINGAPORE Airlines (SIA) and Virgin Australia today agreed to establish a long-term partnership that will provide the platform for both carriers to coordinate schedules, offer attractive joint fares and tie up their frequent flyer programmes.

Virgin Australia’s CEO, John Borghetti, called this a “ground-breaking alliance”, saying: “This is an enormous game-changer that will not only make us more competitive in Australia, but also result in more employment opportunities, given the industry’s ability to generate 600 jobs in the economy for every 100 jobs in the aviation industry.”

SIA CEO, Goh Choon Phong, said: “This is a pro-competition alliance and the potential is immense.”

No equity in either carrier was involved, but both airlines were focused on maximising the synergy offered by this alliance.

Subject to regulatory approval by the Singapore and Australia governments – which is expected within six months – Virgin Australia’s customers will be able to access about 70 additional destinations covered by SIA and its subsidiary SilkAir, while SIA/SilkAir customers will enjoy similar access to about 30 new destinations served by Virgin Australia.

Both airlines will codeshare on each other’s international and domestic flights, but the cooperation for the moment will not extend to the trans-Pacific Australia-US route that SIA has long sought.

“We want to continue pushing for the trans-Pacific flight from Australia to the US, and hope that the alliance with Virgin Australian will strengthen SIA’s case,” said Goh.

Goh emphasised that going forward, “anything that helps this alliance is on the table”. He did not discount the possibility of SIA expanding its operations into more Australian points, or jointly operating a route with Virgin Australia.

Borghetti also confirmed that there was a possibility of Virgin Australia operating its aircraft into Singapore.

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