Virgin Australia CEO Paul Scurrah says that the option to sign up for a global alliance such as Star Alliance or SkyTeam remains on the table for the airline’s “future international network strategy”, but is far from a cure-all for the troubled airline.
“There’s a lot that’s good about our airline (and) a few hurdles we need to get over to make us as profitable as we know we can be,” Scurrah tells Executive Traveller.
“In terms of priorities for me, I think it's important that we acknowledge the headwinds that are coming at us, and we right-size to make sure that cost base is more suitable to a profitable airline.”
There are, Scurrah admits, “pros and cons” to the alliance proposition, and points to a recent customer survey on airline alliances as part of a broader sweep “to assess the strengths and weaknesses of joining or not joining.”
“I think the obvious upside is that there is a branded network, it’s a little more obvious about who you’re aligned with,” he reflects. “So not having that Star Alliance, SkyTeam or Oneworld brand on our network makes it a little harder for a customer to understand who we are aligned with.”
Vigin's bespoke alliance approach
But inking an agreement with any of those three – or more realistically two, given that rival Qantas is a cornerstone member of Oneworld – could put an end to Virgin’s looser and more diverse web of partnerships with the likes of Singapore Airlines, Delta Air Lines and Etihad.
“One downside for us is the disruption it would cause to our current alliances, whether that would be worth the investment.”
“We have the advantage of being able to strike bi-laterals with individual airlines that can help make the biggest and strongest network, regardless of alliances.”
“We've got an amazing partnership with Delta, with seamless and reciprocal recognition of our high-value guests, access to the lounges, everything you'd expect if you were flying those routes on an alliance.”
“We have a wonderful relationship with Singapore Airlines, and we've now got the technology to have automatic recognition of high-value guests without the manual processes we used to have, and lounge access is a part of that as well.”
“So we can actually pick and choose the very best option for us to all destinations.”
If anything, Scurrah is interested to see if Virgin’s DIY alliance model can be fine-tuned within its existing framework. “What is it (our customers) like about alliances that we think we can replicate, without being in one?” he ponders.
“I do think that we've got a uniquely better offering at the moment by not branding as a member of an individual alliance” he circles back.
“But if at some point in time it seems better for us to be part of an individual alliance, then we would make that call.”