SINGAPORE: SIA does Virgin deal, announces LCC

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 […]


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 longhaul 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, premiummarket 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.