Virgin Australia will end its reciprocal frequent flyer and interline arrangements with Malaysia Airlines as it pursues a partnership with the Kuala Lumpur-based carrier’s rival Singapore Airlines (Sydney Morning Herald, 28-Jun-2011). Virgin and Singapore Airlines have lodged an application with the Australian Competition and Consumer Commission to form a strategic alliance, which would see the two codeshare and cooperate on pricing, scheduling, marketing and sales on Australia-Singapore services and international and domestic connecting flights. They will also bid for corporate and government travel contracts, and offer reciprocal benefits to members of their respective frequent flyer programmes including lounge access and the ability to earn and burn points. Virgin and Singapore Airlines have said they are looking at new routes, but specific city pairs were left out of the application made public. Malaysia Airlines will join the oneworld alliance and seek closer cooperation with national flag carrier Qantas Airways.
Virgin drops MAS relationship for SIA
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Thai Airways falls behind Singapore Airlines Group with regional connectivity: Part 1
Thai Airways will enter a new phase over the next year as it completes its transformation plan and starts to consider potential options for resuming expansion. Regional international growth is the most logical area to focus on, using the group’s full service short haul subsidiary Thai Smile.
Thai Smile currently only serves four international destinations. As Thai Airways mainline transitions to an all-widebody fleet the group will need a much larger international network from Thai Smile.
Thai Airways should also examine better integration of Thai Smile, following the model used by Singapore Airlines (SIA) with its full service regional subsidiary SilkAir. The current setup, including separate reservation systems and sales teams, is far from ideal and must be improved in order for the Thai Airways Group to close the gap with the SIA Group in key markets such as China, India and ASEAN.
Virgin Australia realigns its airline partnership priorities on new long haul strategy: Part 2
As Virgin Australia's unique accumulation of airline shareholders on its registry evolves, some of the longer term outlines of the Australian airline's strategy are unfolding. Air New Zealand is withdrawing as an equity owner, although the future nature of its partnership with Virgin has yet to coalesce. HNA Group, with its subsidiaries Hainan Airlines and Hong Kong Airlines is now on the register, along with the Nanshan Group, while Etihad and Singapore Airlines remain as substantial minority owners.
Part 1 of this report reviewed some of these issues in the context of Virgin Australia's international route plans.
Part 2 reviews the actual changes planned, as they relate to Virgin's US and Abu Dhabi routes and sets out why a greater emphasis on US routes is desirable for the short term, while a full picture becomes available for the more risky Chinese market.