Singapore Airlines sees value in Virgin
Singapore Airlines says it is holding its own against Qantas and Emirates in the battle to convince travellers to fly to Europe via its home turf rather than Dubai.
A month after doubling its stake in Virgin Australia to 20 per cent, Singapore Airlines said it believed there was potential to boost flights or use bigger aircraft on Australia routes, thanks to its alliance partner feeding more passengers on to its network.
As part of efforts to squeeze more out of the alliance, SIA executive Mak Swee Wah said the airline was in talks with Virgin about strengthening loyalty programs and members' ability to earn and redeem points.
"That is a very big piece of any co-operation because that is the part that is very meaningful to the market," he said of co-operation on frequent-flyer schemes.
One of Virgin's biggest challenges remains putting its Velocity scheme on a par with Qantas' frequent-flyer program, which remains the latter's most potent weapon.
Mr Mak's comments come as Singapore Airlines placed a $US17 billion ($17.6 billion) order for new planes, including the stretched version of the 787 Dreamliner. Splitting its order between the world's two major aircraft makers, SIA will buy 30 Boeing 787-10xs and 30 more Airbus A350-900s.
With the Australian economy resilient, Singapore has expanded aggressively on routes here and by July it will have increased flights from 112 a week to 121.
"Competition is very intense in the market but we intend to hold our ground, if not even to expand the pie a bit," Mr Mak said on Friday. "We want to make sure our footing in this market is secure, and I think this alliance with Virgin has made us even more steady."
He declined to reveal the level of growth the airline was targeting.
Virgin will be SIA's sole equity investment outside Singapore once it completes the sale of a 49 per cent stake in Richard Branson's Virgin Atlantic to US airline Delta.
Mr Mak, in Australia for a whistle-stop tour of his airline's operations, said the alliance with Virgin was a "big piece" of its strategy for this country, its third-biggest market.
"Our involvement with Virgin is for the long term, and important enough for us to have a stake. When the opportunity came for us to increase the stake, we said, 'Why not?"' he said, referring to the talks to buy a 10 per cent stake from Virgin Group last month. "There is nothing like money to underline the importance of something you have."