Virgin Atlantic to join SkyTeam? Exec says it will "probably make sense"

By David Flynn , February 18 2013
Virgin Atlantic to join SkyTeam? Exec says it will

Virgin Atlantic appears to be edging ever closer to signing up with the SkyTeam airline alliance, with its chief commercial officer saying that it will “probably make sense” for Virgin to join SkyTeam.

“Being able to compete with BA-AA is pretty important to us"  Virgin COO Julie Southern told The Financial Times on Sunday. "We will look at SkyTeam, and I suspect in due course you may see us joining SkyTeam, but we’ll only do it if it makes economic sense to the business.”

While Virgin Atlantic has formed its own UK-US links through last December's decision to see Delta Air Lines take over Singapore Airline's 49% stake in Virgin, this still lacks the full muscle of a global alliance, such as British Airways and American Airlines enjoy through their membership of oneworld.

"As (other airlines) join together, it’s not that we wouldn’t have had a future, but it would have been a more and more challenged future" Southern suggests.

PREVIOUS | Virgin Atlantic could sign onto the SkyTeam airline alliance following the overnight purchase of 49% of Sir Richard Branson's baby by US carrier Delta, one of the founding members of SkyTeam.

Although Branson has traditionally been reticent to join an alliance, he recently indicated that this may become a matter of survival.

"Virgin Atlantic has always enjoyed its independence, but since pretty well every competitor that we have has an alliance I think we have finally decided that to survive we need to have an alliance," Branson told Bloomberg Television in October, tipping the announcement was likely to come within the “next three to four months."

Speculation immediately fell on both the Star Alliance and SkyTeam camps, given that oneworld is home to his bête noire British Airways.

One factor in Star's favour was that then co-owner of Virgin Atlantic, Singapore Airlines, belongs to the Star family.

But Delta's planned purchase of the entire SQ stake – a deal valued at US$360 million – obviously changes that dynamic.

Under the new Delta-Virgin Atlantic alliance travellers on both airlines will automatically enjoy reciprocal frequent flyer benefits, such as earn-and-burn rights on both airlines plus access to Delta Sky Club and Virgin Atlantic Clubhouse lounges.

Singapore Airlines' KrisFlyers won't be left in the lurch, however, with SQ promising in a media statement that "commercial arrangements between Singapore Airlines and Virgin Atlantic, encompassing codesharing, frequent-flyer programme ties and reciprocal lounge access, are expected to remain in place after the divestment."

Follow Australian Business Traveller on Twitter: we're @AusBT

David

David Flynn is the Editor-in-Chief of Executive Traveller and a bit of a travel tragic with a weakness for good coffee, shopping and lychee martinis.

01 Feb 2012

Total posts 370

Interesting development, seems like another way in which oneworld is falling behind. This is already the smallest of the 3 alliances by many measures such as membership, annual passengers, destinations. This will further increase the gap.

KG
KG

Qantas - Qantas Frequent Flyer

10 May 2011

Total posts 736

Oneworld is perhaps the smallest of the three, but they have a good reach. With most probably LATAM joining (they already have LAN) and QR, MH and most probably Sri Lankan, I think they have the world pretty much covered. I agree that annual passengers and destinations counts, but in the end it is about the geographic spread, quality of service and most important profitabillity that keeps an alliance going and the members will increase with the before mentioned airlines joining.

01 Feb 2012

Total posts 370

Profitability is important, unfortunately its founding members include Qantas, AA, and BA :)

Though I agree, I think it has the best perks of membership and it doesn't have any many low quality airlines like the other alliances. Unfortunately sometimes with airlines quality product/service is inversely related to profitability.

22 Jul 2011

Total posts 19

Try telling someone trying to route sectors such as Seoul-Beijing, Johannesburg-Cairo or Athens-Nice on Oneworld carriers about how good their reach is.

KG
KG

Qantas - Qantas Frequent Flyer

10 May 2011

Total posts 736

Sure, there are always examples of specific routes, I too can name a lot of very specific routes where I cannot get with Star Alliance or Skyteam, but OW does get me there non-stop.

22 Jul 2011

Total posts 19

Unfortunately, pure mathematics means the list of those sorts of routes is larger with oneworld than with Star or Sky.

Oneworld - 810 airports in 149 countries

Star Alliance - 1,356 airports in 193 countries

SkyTeam - 1,000 airports in 187 countries

12 Dec 2012

Total posts 6

Oneworld - 11 Full Members - 810 airports (average 73.6 per member) in 149 countries

Star Alliance - 27 Full Members - 1,356 airports (average 50.2 per member) in 193 countries

SkyTeam - 19 Full Members - 1,000 airports (average 52.6 per member) in 187 countries

This says a lot about the strengths of individual members!  Everyone has their own priorities, and if size is what matters then that's fair enough.  I certainly would not want to see OW grow anywhere near the size of the other two, to the detriment of quality and safety! 

22 Jul 2011

Total posts 19

If I'm travelling on business or leisure, I'm not going to go via Tokyo or Hong Kong to get from Seoul to Beijing, or via London to get from Johannesburg to Cairo.

Some people might so that they can stick with "their" alliance, but then the alliance is doing one of the main things they set out to achieve, restrict consumer choice by making the customer voluntarily not even consider less expensive, more convenient or direct routings.

KG
KG

Qantas - Qantas Frequent Flyer

10 May 2011

Total posts 736

@Str8talk: Agreed, quality over quantity, kind of what I tried to convey in my earlier post. 

KG
KG

Qantas - Qantas Frequent Flyer

10 May 2011

Total posts 736

@ Globehopper : each to their own, we should be great full we have something to choose. If Star suits somebody due to geographic reasons or simply preference, fantastic! Living in Australia I am not a fan of Star, although I am secretly hoping (well, was...) for Virgin Australia to join Star. I benefit more from being a member of an alliance and Oneworld suits my needs best, was I to live in Singapore or Anywhere in Africa spit would have probably been Skyteam or Star. Although, big plus for me is the fact that highest FF tier in OW gives you F lounge acces amongst other benefits....

KG
KG

Qantas - Qantas Frequent Flyer

10 May 2011

Total posts 736

Agreed, quality over quantity, kind of what I tried to convey in my earlier post. 

20 Feb 2012

Total posts 128

sure Oneworld is the smallest- but they dominate the corporate travel sector ( have the largest marketshare)- and airlines in alliances really care about these passengers more than any others- so Oneworld strategy is working as their few airlines carry more premium passengers 

Qantas

10 Sep 2011

Total posts 162

If the alliance is expected to feed passengers into Australia, with lots of growth, Sky Team is the only current brand able to do so.

Sky Team has most of the Chinese carriers (1.1b people), should soon pick up Garuda (260m odd people), and the Russian market with Aeroflot.

With Virgin's existing alliances, Sky Team would appear to be the strongest for long term growth.

KG
KG

Qantas - Qantas Frequent Flyer

10 May 2011

Total posts 736

I would challenge your statement that Skyteam would be best for growth. Yes Virgin Atlantic is owned by DL for a big deal, but VA has strong ties with Star Alliance and Star Alliance has also a strong brand feeding into Australia with SQ and TG and even looking at NZ they have strong presence. 

It seems a logical choice to go for Skyteam but I reckon that there is a trend towards partnerships rather than alliances and although still not mature I have an idea that what QF started with EK and in a lesser extend what VA is doing with SQ and EY has potentially a future. Just speculating, but still.

If Virgin Atlantic is joining skyteam I wonder if VA will fowwlo suit....

Qantas

10 Sep 2011

Total posts 162

I'm measuring future growth in terms of a growing middle class.  With businesses expected to grow income every year, tapping into a market that is expected to grow for many years makes sense.

If VA were to follow suit to join an alliance, I see Skyteam being the preferred alliance for the same reasons.  Borghetti has also intimated a soft spot for Skyteam (re Delta) in interviews.

Qantas - Qantas Frequent Flyer

01 Jan 2013

Total posts 12

Pardon my opinion, but when compared to Oneworld, it seems ST and SA are a response to OW and both, especially ST, athough having a lot of members, seem to be a bit infantish, seeing as their benefit's structure is no where near the complexity and by far better rewards scheme of Ruby, Sapphire and Emerald


Hi Guest, join in the discussion on Virgin Atlantic to join SkyTeam? Exec says it will "probably make sense"