Singapore airlines announced this after-market yesterday: "Singapore Airlines has today announced its intention to establish a new no-frills, low-fare airline operating widebody aircraft on medium and long-haul routes....Operations are expected to begin within one year. The airline will be wholly owned by Singapore Airlines, but will be operated independently and managed separately from SIA"
Could this new airline be yet another option for Virgin Aust to form an Asian alliance with? Remember Singapore owns c49% of Virgin Atlantic and thus has a strong existing connection with the Virgin brand. At very least it increases the bargaining power that Virgin Aust will have when picking potential Asian alliance partners.
For example, IMO, an arrangement could probably be formed where VBA & the new Singapore airline share 50% of the Aust-Singapore traffic, similar to the AirNZ arrangements. Giving VBA an Asian hub and the new Singapore airline access to the Australian market.
Ben Sandilands from Crikey brought it up today (good article, worth reading): "The move into longer haul low cost operations by Singapore Airlines also gives Virgin Australia investors something to think about in the context of the recent "healing" of relations between the Virgin brand and the Singaporean group, and Virgin Australia's announced intention of establishing an Asia alliance by the end of December." http://blogs.crikey.com.au/planetalking/2011/05/26/singapore-airlines-to-join-longer-haul-low-cost-airline-battle/
Lastly, IMO, it also shows something about what Singapore Air thinks of Tiger, that is, they would rather start a new "low-fare" airline they have 100% control over, rather than concentrate on one they have only 1/3 ownership of...
VBA Price at posting:
29.0¢ Sentiment: LT Buy Disclosure: Held
