One of the interesting trends we’ve seen this year is the airline industry is the pressure for traditionally “independent” airlines to join an alliance. It all started with Qantas and Emirates announcing a massive joint venture, which for Qantas seems to take priority over the OneWorld alliance. Then we saw Qatar Airways announce they’ll be joining the OneWorld alliance, which is a huge move, since up until now the “big three” Middle Eastern airlines have done everything they can to avoid it.
Then just last week Richard Branson announced that Virgin Atlantic is seriously considering joining an alliance, something they think they need in order to survive. I’m convinced they’ll join Star Alliance, in part for the reasons I described in that post:
By far the most logical choice for Virgin Atlantic would be Star Alliance, in my opinion. As it stands, Virgin Atlantic is 49% owned by Singapore Airlines, and partners with a handful of Star Alliance airlines. British Midland (a Star Alliance member at the time) was recently taken over by British Airways, so Star Alliance now doesn’t have an airline based in London. OneWorld is completely out of the picture given that British Airways belongs to it, which leaves SkyTeam. While I’m sure SkyTeam would like to have Virgin Atlantic, I’m not sure how much value they could add for Virgin Atlantic.
Well today some more news was announced that brings the entire Virgin brand a whole lot closer to the Star Alliance. Via BBC, Singapore Airlines just purchased a 10% stake in Virgin Australia, while Virgin Australia purchased a 60% stake in Tiger Airways, Singapore’s struggling Australian carrier.
While this is hardly conclusive, I do think this suggests that the entire Virgin brand is moving towards the Star Alliance. Both Virgin Atlantic and Virgin Australia could add a lot of value to the Star Alliance, so I wouldn’t be surprised to see them both eventually join. I think the reasons for Virgin Atlantic joining are obvious, though even Virgin Australia could add a lot of value given how weak the Star Alliance is in Australia. As far as Virgin America goes, well, I suspect they’ll be out of business before any of this happens given their financial results.
What do you guys think?