Virgin Atlantic to join Star Alliance or SkyTeam? Richard Branson keeps 'em guessing...

By David Flynn, October 27 2012

Virgin Australia may not be rushing into the embrace of a global airline alliance but its UK sibling Virgin Atlantic is set to join either Star Alliance or SkyTeam in early 2013.

"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," Sir Richard Branson told Bloomberg Television in India, where he is launching the airline's new London-Mumbai route this weekend.

Branson has traditionally been reticent to sign up with any alliance, but admitted "It’s likely we may well give up and become part of an alliance as a whole", tipping the announcement was likely to come within the “next three to four months."

It's Star vs SkyTeam

Naturally Branson didn't name which alliance he was talking with – or more likely, which alliance was courting him – but it's known to be either Star Alliance or SkyTeam, given that oneworld is home to his bête noire British Airways.

One factor in Star's favour is that Singapore Airlines, which owns 49% of Virgin Atlantic (the rest is in the hands of Branson's Virgin Group), is a Star member.

But alliance considerations are far more complex, and aim to leverage the routes of potential partner airlines to extend an airline's own effective reach as part of a 'virtual network'.

No 'obvious choice', says Virgin Australia

Earlier this year, Virgin Australia CEO John Borghetti poured cold water on speculation that the airline was planning to join Star Alliance, suggesting that that, if anything, SkyTeam could be a better fit.

Although Virgin shareholder Air New Zealand and partner Singapore Airlines both belong to Star, this doesn't make that alliance a fait accompli, Borghetti told The Australian.

"It's wrong to assume Star is the obvious choice" he said, citing that Virgin's US partner Delta Air Lines "is in Sky Team and Sky Team is a very formidable group, and I think Delta are terrific partners."

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David
David

David Flynn

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.

PeterLoh

PeterLoh

Qantas - Qantas Frequent Flyer

25 May 2012

Total posts 579

I think they'll have some difficulty making their case to anti-competition boards if they are wanting to join Star given that Star has a massive cross-Atlantic presence at LHR (with US & UA) even despite the BA-AA stronghold. Delta's presence is notably less.

It will be interesting to see how VS's alliance decision will impact DJ, if at all.

TheRealBabushka

TheRealBabushka

21 Apr 2012

Total posts 3034

"...Sky Team is a very formidable group, and I think Delta are terrific partners" That's a diplomatic line if I ever heard one! Corporate Communications at DJ/VA needs to give further media training to Borghetti. That statement just sounds too fake to be taken seriously.

KG

KG

Qantas - Qantas Frequent Flyer

10 May 2011

Total posts 736

Very interesting to see how it pans out. No choice is obvious if you ask me, alhthough a membership of OW can probably be ruled out. As VS is competing directly with UA on EWR, ORD, IAD and SFO routes with UA, this might be a dealbreaker in joining star alliance. Indeed SQ has a major stake in VS but that would also mean they want VS to make a choice of alliance that will yield them revenue rather than necessarily link them up with the same alliance as SQ is in. VS has no feeder flights in Europe and focusses on longhaul entirely (they are starting some short haul routes now that BMI has been incorporated in BA). Lookng at this, obvious choices would still be Star or Sky as both LH or AF/KLM could feed traffic to VS flights. If they would join Sky they could increase their presence in Africa by codesharing with AF/KL and Sky would have a direct link to Australia again with one of their member airlines (rather than codesharing on QF).

KG

KG

Qantas - Qantas Frequent Flyer

10 May 2011

Total posts 736

...ofcourse one does currently have the new "Canton Route" on a SkyTeam carrier....


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