While Virgin Australia is a lovely airline to fly with, they’re a confused airline when it comes to the business side of things.
Virgin Australia’s 777 business class
Virgin Australia’s unusual ownership structure
The airline’s ownership structure doesn’t give it a very clear direction as to what it should do — for example, the airline is 21% owned by Etihad Airways, 19.8% owned by Singapore Airlines, and 13% owned by HNA Group (the parent company of Hainan).
Virgin Australia isn’t in any global alliance, and their partnerships have been pretty weak, which I think is one of their challenges.
There has been talk for a while of HNA Group selling their stake in Virgin Australia. They actually only bought this stake in mid-2016, though they were in a very different financial situation. HNA Group hasn’t been doing well financially, and has been selling off all kinds of assets. Virgin Australia isn’t making money, so I can understand why they’d want to sell their stake.
Turkish Airlines might be interested in Virgin Australia
Bloomberg is reporting that Turkish Airlines is allegedly interested in buying HNA Group’s stake in Virgin Australia. This is according to sources close to the matter, though they also note that this is just a preliminary discussion, so there’s no guarantee this will happen.
Meanwhile both HNA Group and Virgin Australia aren’t confirming these talks.
I’m writing about this not because I necessarily think it’s going to happen, but because I find the prospect of this to be really interesting.
Turkish Airlines & Australia
Turkish Airlines flies to more countries than any airline in the world, though they don’t fly to Australia (or New Zealand, for that matter).
Istanbul is in a tricky location geographically when it comes to offering service to Australia. Just to provide some context on distance:
- Istanbul to Perth is 7,491 miles
- Istanbul to Melbourne is 9,093 miles
- Istanbul to Brisbane is 9,178 miles
- Istanbul to Sydney is 9,300 miles
So, could Turkish even fly nonstop to Australia?
- They could easily fly to Perth with either the 787-9, A350-900, or 777-300ER
- They might be able to fly nonstop to Melbourne with the 787-9; as a point of comparison, the world’s current longest 787-9 flight is from Perth to London on Qantas, which covers a distance of 9,009 miles
Turkish Airlines 787-9
Meanwhile without an A350-900ULR or similar aircraft, the flights to Brisbane and Sydney seem like they’d almost certainly be out of range, at least without a significant payload penalty.
So, how could a Virgin Australia tie-in change things?
- Virgin Australia could provide some connecting traffic if Turkish Airlines were to fly to Perth; however, with many passengers having to double connect, it’s questionable if the route would be profitable, especially as we’re seeing more direct flights on the horizon
- If Turkish Airlines were to be able to fly nonstop to Melbourne, they’d most definitely have a lot of connecting traffic
Of course it’s worth noting:
- If both airlines saw potential there, on the surface there’s nothing preventing Turkish and Virgin Australia from having a partnership even without an equity investment
- Virgin Australia and Etihad already have a close partnership, and for these purposes Etihad and Turkish would be competing pretty closely; it seems like that might not go over well
- Virgin Australia would still have an outrageously complicated ownership structure, as they’d be owned by two Star Alliance airlines and Etihad, and they’d have a joint venture with Delta on transpacific flights
Etihad & Virgin Australia already have a close partnership
Bottom line
I’m not sure anything will come of this, but I’ve always found it interesting that Turkish flies to more countries than any airline in the world, but hasn’t flown to Australia.
I get the economic and logistical challenges, but it’s still surprising to me. Heck, I’m surprised they don’t even operate a fifth freedom flight to Australia. After all, the airline operates some pretty unusual fifth freedom flights, like Bishkek, Kyrgyzstan, to Ulaanbaatar, Mongolia.
Do you think Turkish Airlines will ever fly to Australia? Could you see value in a tie-in between Turkish and Virgin Australia?
I think this is likely to eventuate as a codeshare and lounge reciprocity partnership, to take advantage of Virgin Australia's network from DPS.
@Duncan, I'm not disagreeing with you that the stopover in PER for pax from the East Coast stinks and if I were you I'd definitely be looking for a SIN/HKG/DXB stopover over PER any day. But I think you are discounting the demand ex PER, with the two factors of the significant UK population along with the reduction in capacity that I mentioned. There are still plenty of people ex PER heading to Europe and...
@Duncan, I'm not disagreeing with you that the stopover in PER for pax from the East Coast stinks and if I were you I'd definitely be looking for a SIN/HKG/DXB stopover over PER any day. But I think you are discounting the demand ex PER, with the two factors of the significant UK population along with the reduction in capacity that I mentioned. There are still plenty of people ex PER heading to Europe and the new QF flight gives them an option, especially for the British Isles, but also for other points in Europe. I recently searched a return flight from MUC to PER and the QF flight via LHR featured heavily and was competitively prices and the time was favorable.
Can't see TK investing in VA...
Thought TK would of done something like a 5th freedom from Denpasar to Perth before flying directly to the Australian continent.
I also believe recently back in April, Australia and Turkey had a bit of a diplomatic stoush whether any weight bears in that I'm not certain.
I don't see any logic TK buying a share of VA.. IMHO.
Just a little suggestion, unrelated to the topic: change the white balance of cover pictures like this. It's easy and quick to do and would make the photos look much better than the almost all blue photo currently used.
That should read "fleeting"
There is a version of Godwin's law which says any discussion about Virgin Australia will eventually turn up a comment that says VA should join Star Alliance. Having said that, they do need stability in their alliance structure. I can see Turkish being as fleeing as HNA group sadly.
@Duncan
If you want to sound as smart as you think you are, when abbreviating airlines, best use actual IATA abbreviations (SQ and CX).
@Dan~ I don't see a SkyTeam hookup a worthwhile proposition for VA. It would deliver very, very little. If they do not have the stomach to negotiate membership of *A they need to do as Alaska did and take on board a mix from the 3 alliances plus some non-affiliated airlines. They have a FF program that could be ramped up into a money spinner with a decent panel of partners. That's where the money...
@Dan~ I don't see a SkyTeam hookup a worthwhile proposition for VA. It would deliver very, very little. If they do not have the stomach to negotiate membership of *A they need to do as Alaska did and take on board a mix from the 3 alliances plus some non-affiliated airlines. They have a FF program that could be ramped up into a money spinner with a decent panel of partners. That's where the money is in the business these days.
DL and NZ have nothing to fear really and everything to gain. VA might have to curb its NZ aspirations though as a pre-condition. LOL.
@glenn t
The *A has well and truly sailed for VA when they had the bust-up with NZ. In addition, joining any Alliance costs money to join plus ongoing expenses, money that VA currently does not have.
Even in the unlikely case of VA applying for *A. The hostile ex NZ alongside their BFFs at UA will use their veto to block any VA application.
SkyTeam is currently VA's only alliance choice, alongside their TransPacific...
@glenn t
The *A has well and truly sailed for VA when they had the bust-up with NZ. In addition, joining any Alliance costs money to join plus ongoing expenses, money that VA currently does not have.
Even in the unlikely case of VA applying for *A. The hostile ex NZ alongside their BFFs at UA will use their veto to block any VA application.
SkyTeam is currently VA's only alliance choice, alongside their TransPacific BFFs at DL and their sister/(non member) SkyTeam associate at VS.
VA needs to join *A, and TK needs to get A350's or the like before they can seriously consider any tie-up. VA as a full member of *A would be transformative for it and provide some direction, which is currently lacking. It could become the only *Australian airline providing connections to a host of *A airlines currently operating out of every major Oz city, whether anything comes of TK or not.
Unfortunately VA currently has pretty directionless leadership.
I am not sure where Duncan gets his information from, but from sources within QF the Per/Lhr is operating the with loads of +90% and uplift pax loads Perth can be in the +100 a lot in J. He also forgets the demand from the UK is strong with joining loads to Perth well over 100 pax. QF will not ditch Per, if and when project sunrise happens the demand is there for a dedicated...
I am not sure where Duncan gets his information from, but from sources within QF the Per/Lhr is operating the with loads of +90% and uplift pax loads Perth can be in the +100 a lot in J. He also forgets the demand from the UK is strong with joining loads to Perth well over 100 pax. QF will not ditch Per, if and when project sunrise happens the demand is there for a dedicated Per/LHr flight. Also having just booked flights to Lhr in November for my wife and myself, the fares ex Mel were significantly cheaper in J and PE on QF via Sin than going Per on the QF009.
ROFL, Turkish Has less money to spend than just about any airline at the moment and the Turkish Government has very strict currency controls.
Dennis there are no passengers ex Perth the economy is borderline reccession and the market was saturated with seats then things got tight. I would hardly call 20-40 passengers joining QF to LHR "flocking". The moment QF can get Project Sunrise of the ground, Perth will be dropped. The daily...
ROFL, Turkish Has less money to spend than just about any airline at the moment and the Turkish Government has very strict currency controls.
Dennis there are no passengers ex Perth the economy is borderline reccession and the market was saturated with seats then things got tight. I would hardly call 20-40 passengers joining QF to LHR "flocking". The moment QF can get Project Sunrise of the ground, Perth will be dropped. The daily 787 flight replaced an A380 flight so the number of seats ex Melbourne fell buy about a third. When making a QF booking to LHR from the East Coast the booking engine takes you to the MEL-PER-LHR flight first then via SIN second, PER-LHR is Joyces show pony. Like most East Coasters a stop over in PER versus SIN is a no brainer, QF lost a lot of passengers going via Dubai and when it thought it wouldn't loose face it went back to SIN. The biggest international airlines serving Australia in terms of flights SA and CP if you do seats then it would be Emirates. Back to topic SA gave up on VA to some extent, long odds Delta maybe but logic is in very short supply in the airline industry. Flying SYD-LHR for almost twenty years and often twice a month, my prefered route is SYD-NRT/HND- LHR, it has the less jetlag by a long shot, you arrive tired but not jetlaged.
PS. Lucky hope mum is doing well.
@pixielott46, not sure what you mean. It’s longer to fly London to Sydney than Istanbul to sydney yes. If you’re referring to Qantas’ direct flight that goes from Perth to London
Would love to see Turkish Airlines come to Perth! But with Etihad gone and Emirates cutting capacity, seemingly the tide is turning on these airlines as passengers flock to QF (to LHR) and back to the Asian carriers. Additionally, any potential feeder traffic from VA to a TR Perth to Istanbul flight wouldn't really work as they would need to integrate the domestic-international connection better. At least VA is at the International Terminal now so that's a start.
I'm a VA Platinum flyer and a big fan - also a QF Platinum. VA is fast losing favour with many, especially after NZ ditched their partnership. The badly need a controlling airline such as SQ who could well take the HNA stake and become the largest owner. At the moment the new boss at VA has frozen everything, with all operations 'under review'. Something needs to happen.
Makes no sense for TK to buy a stake in VA.
why is it less miles to Sydney from Istanbul than London?
Turkish have been talking about Australia for ten years and got close to starting twice. I guess if they opt for the A350-900ULR they might do something to the east coast but unless and until they won't.
Also Virgin Australia is a rather confused offering that competes badly with Qantas. It's still a budget airline at heart and needs to grow up. They try to play both sides of sitting close to both *A...
Turkish have been talking about Australia for ten years and got close to starting twice. I guess if they opt for the A350-900ULR they might do something to the east coast but unless and until they won't.
Also Virgin Australia is a rather confused offering that competes badly with Qantas. It's still a budget airline at heart and needs to grow up. They try to play both sides of sitting close to both *A and ST and do neither well. If EY were to join *A that might tip the balance but I suspect SQ would object to that anyway.
Now, if only there was an Australian airline called Ansett...
You'd have to be a turkey to buy a stake in VA.