SIA does deal with Virgin, announces budget carrier

Singapore Airlines (SIA) has struck a deal with Virgin Australia in its second major move in as many weeks, as regional competition intensifies. The tie-up with the Australian carrier will allow SIA to expand its presence Down Under and potentially pave the way for its entry into the lucrative and long sought-after Australia-US market. The […]


low-cost carrier Singapore Airlines Tiger Airways Virgin Australia


Singapore Airlines (SIA) has struck a deal with Virgin Australia in its second major move in as many weeks, as regional competition intensifies. The tie-up with the Australian carrier will allow SIA to expand its presence Down Under and potentially pave the way for its entry into the lucrative and long sought-after Australia-US market. The deal, subject to regulatory approval by the authorities on both sides, includes a code-sharing agreement with both carriers also planning to coordinate flight schedules. The announcement comes just two weeks after SIA surprised industry watchers by unveiling plans to launch a low-cost long-haul carrier within a year. The new carrier will operate twin-aisle, wide-body aircraft on medium- and long-haul routes. How big the new business will be, where it will fly to, and who will run it will be unveiled later, SIA said. The airline already owns about a third of Singapore budget airline Tiger Airways, which serves the short-haul market. Other shareholders include Dahlia Investments, a wholly owned subsidiary of Singapore’s government investment company, Temasek Holdings. SIA’s decision to branch out comes as it faces increasing competitive pressure from budget rivals chipping away at its short-haul segment, and a dogfight with full-service airlines like Cathay Pacific and Emirates for the long-haul, premium-market share. In its own backyard, SIA also has to deal with unconfirmed plans by Australia’s Qantas to set up a new Singapore carrier, and moves by Malaysian budget airline AirAsia to grow its business here by basing aircraft and crew in Singapore.