What might happen to Virgin Australia if Singapore Airlines buys a controlling stake?

By bmc | Apr 18, 2016, 01:09 PM

Big if but what might happen to VA if SQ buy a controlling stake? Assuming SQ want to and fight off other offers and get appropriate government approvals etc etc

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By deanr | Apr 18, 2016, 02:02 PM

Its name will change to Virgin Singapore, its airline code to VS and then Virgin Atlantic will rejoice because it can finally become 'VA'.

That's what this is all about, right? ;p

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By bmc | Apr 18, 2016, 02:10 PM

lol

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By Mal | Apr 18, 2016, 02:48 PM

Nobody has any real idea of what would happen, not even VA or SQ themselves, but here's what I would like to happen.

1. SQ takes majority stake in VA, including buying out Etihad's stake. VA keeps Etihad 'partnership' just like it has Air New Zealand and Delta partnership but SQ in the driver's seat.

2. VA drops its SYD-LAX and BNE-LAX flights and SQ gets 'fifth freedom' rights to fly from Australia to the USA, something it has wanted for years but has always been denied thanks to QF machinations.

3. VA also axes its silly Sydney-Abu Dhabi flight and with the exception of Trans-Tasman services becomes a domestic-only carrier so it can focus all its energies on competing against Qantas in the Australian and AU-NZ market.

4. SQ sponsors VA to become a member of Star Alliance, giving Star a local partner airline, that alone would boost VA patronage among many business travellers.

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By hutch | Apr 18, 2016, 04:52 PM

Whilst you may like it to happen, it is not really likely:

1. Problem with that is that if SQ gains the controlling stake there is really no incentive for them to keep Ethiad partnership - they would want to feed SQ services. Additionally, if Virgin is not flying into the USA, it is very unlikely for that SQ is going to provide feed for Delta flights in the USA and nor is Delta going to put passengers onto SQ flights instead of their own.

2. Something it has wanted, but with QF not using SIN as a hub anymore, Singapore doesn't really have many bargaining chips to make this happen (let's face it, it is very unlikely to occur anytime... not impossible, but unlikely). United/Air NZ wouldn't exactly be pleased and the issues with feed at the USA remain (Delta/United unlikely to feed SQ over their own services). Worth noting that when SQ wanted to fly the pacific, it was a duopoly between United/Qantas.... different picture today with different yield.

3. What more can VA do to compete with Qantas? Part of the disadvantage for VA against QF is is their lack international routes... going backwards may not help them, particulary if the VA/DL partnership is making money.

4. I can agree with you on this front...entering Star would likely be a good thing for Virgin both in feed and also improving the Velocity program.

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By JackB | Apr 18, 2016, 04:18 PM

mal,

Why would they get rid of the 777 adn the routes they fly, if its making them money. I know for a fact that its a profitable route. I have never known for an airline to pull flights that make them money?

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By aviation | Apr 19, 2016, 08:08 AM

Isn't it pretty well publicised that the VA international services are actually losing them a heap of money???

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By JackB | Apr 20, 2016, 09:13 PM

not on the long haul routes. 
DPS and HKT, hence why the pulled them.

They were losing so much money from the two routes. 

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By ads086 | Apr 18, 2016, 05:48 PM

I'd leave the 777's on the LAX routes, but I'd drop the Abu Dhabi and pick up a SYD-SIN with it. This would let Singapore redeploy one of theirs onto a new route or increase capacity where its needed.

If they're quick they'd be able to get more 777s at good rates given Boeing are looking for work to carry this program over until 777X kicks off, and launch Hong Kong flights (assuming slots could be arranged) which connect to VS - then VA can fly you to London via 3 different stops.

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By DanV | Mar 16, 2019, 07:28 PM

Nobody has any real idea of what would happen, not even VA or SQ themselves, but here's what I would like to happen.

1. SQ takes majority stake in VA, including buying out Etihad's stake. VA keeps Etihad 'partnership' just like it has Air New Zealand and Delta partnership but SQ in the driver's seat.

2. VA drops its SYD-LAX and BNE-LAX flights and SQ gets 'fifth freedom' rights to fly from Australia to the USA, something it has wanted for years but has always been denied thanks to QF machinations.

3. VA also axes its silly Sydney-Abu Dhabi flight and with the exception of Trans-Tasman services becomes a domestic-only carrier so it can focus all its energies on competing against Qantas in the Australian and AU-NZ market.

4. SQ sponsors VA to become a member of Star Alliance, giving Star a local partner airline, that alone would boost VA patronage among many business travellers.


Although this is 3 years late, I'll reply anyway.

1. Considering SQ recently blamed VA for a downturn in a recent quarter, this is very unlikely. Since then, there's been news of "SQ being interested in a increased VA stake" at least once a year, and in all cases they have turned out to be fizzers. I would not be surprised if SQ actually wanted out of VA.

2. The AU government are still very restrictive on 5th freedom rights. Keep in mind the then-AU government also denied AC the rights to fly YYZ-LAX-SYD back in the late 90s/early 00s. Their viewpoints still haven't changed to this day, despite the changes in governments.

3. This was suggested by NZ, however it was never going to work with VA's complicated shareholder board in which all have their competing interests. NZ quit their VA shareholding and eventually the partnership when it was apparent that the other shareholders accused NZ of being "selfish" and that it would "only benefit them".
If anything, if VA are to be a "primary domestic" carrier, it would likely to be under DL ownership, with their only international being NZ and LAX (under the VA/DL TransPacific JV).

4. VA joining Star Alliance has all but sailed since NZ left the VA board and jointed up with QF. Any attempts by SQ or other shareholders to sponsor VA into Star Alliance will be knocked back by NZ and UA using their veto rights.
SkyTeam is now VA's only alliance option available to them, in conjunction with their long-time BFF relationship with DL.
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