There has been a lot of buzz about Virgin Australia joining one of the big three air alliances. First Virgin announced a joint venture with Delta and there was buzz about VA joining Sky Team soon after. Then in 2011 Air New Zealand invested $143 million into VA buying a 14.9% stake! The blogs then started to buzz again about VA Joining the Star Alliance. Yet to dampen this Buzz CEO John Borghetti told the Australian Business Traveler “You know, we’ve got so much stuff going on at Virgin Australia that that is really not in our thinking at the moment. That is something we’ll think about in 2012 and beyond.”
As 2012 approached many thought the Star Alliance had a shoe in. Air New Zealand held a near 15% investment in VA. Then on march 29, 2012, to further excite the Star Alliance enthusiasts, VA and Singapore Airline began a comprehensive code sharing agreement, reciprocal lounge access, and frequent flyer benefits! At this very moment, I even thought VA was on the path to join the Star Alliance. However, today John Borghetti shocked many when he was quoted saying, “It’s wrong to assume Star is the obvious choice,” 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.”
So at this time Star Alliances Dreams are Dead and the SkyTeam Loyalists are buzzing with excitement. However honestly I don’t see VA joining any alliance. I believe The Virgins will unite and set up their own alliance, grow together and remain separate of any of the big three. Already with hubs in LAX, LON, SFO, and SYD there’s no real need for any of these airline to join an alliance. The Virgin group has already begun reciprocal frequent flyer and redemption across all three airlines. And finally, I think Borgehetti was onto something when he said “There’s no question that cross-border mergers are happening and you wonder whether that’s going to impact on those alliances….And there are more and more bilaterals being concluded just like we’ve done between partners which don’t restrict your ability to work with people.”
