The joint ventures or alliances already in place — with Singapore Airlines over Changi, Etihad over Abu Dhabi, Air New Zealand (to, from and within NZ) and Delta, to and within the US in association with Virgin flights to Los Angeles — form a very comprehensive network in competition with the Qantas’ partnership with Emirates (approval pending), and its major trans-Pacific alliance with American Airlines.
Virgin Australia plus Tiger Australia will develop or expand integrated growth paths with the Singapore-controlled Tiger franchise at Singapore’s major Asia hub airport at Changi, and naturally, those links the Singaporean Tiger has through its substantial equity in separately branded low-cost carriers in Indonesia and the Philippines, two huge markets where Jetstar has no home-based presence.
The alliance between Virgin Australia and Singapore Airlines already gives it potent links between Australia and China, India and the rest of eastern and northern Asia for full service customers over Changi airport, including on SilkAir, the single aisle premium carrier owned by Singapore Airlines.
While Qantas has set up a hub at Singapore which emphasises low-cost connections onto its Jetstar franchise, it has no premium or full service partners for comprehensive services beyond Singapore. This is an obvious weakness in the current Qantas strategy for Asia, but also obviously one that it will do everything it can think of to fix.
The bottom line is that Virgin Australia is now chasing Qantas all over the map of the world, and offering both premium and low cost options where Qantas (through Jetstar) is only able to offer the latter. At present.
Domestically, Virgin Australia becomes a much-strengthened entity in association with Tiger, as well as in terms of offering greatly expanded regional flights, resources industry flights, and international connections to all points abroad, except Japan, which may well be a future step, and to southern Africa and South America.
Borghetti alluded to mistakes Qantas had made with Jetstar, saying “we have learned what not to do in a two-brand strategy” and that Tiger would remain true to its business model, which would not be diluted in any way. “We have to keep Tiger distinctly separate in its brand and consumer expectations,” he said.
Sounds like kiss your knees goodbye will continue to be the lot of big Australians crammed into Tiger’s tiny seats.
This article was first published on LeadingCompany’s sister site, Crikey.
