Virgin Australia CEO: alliances are no 'silver bullet'

Qantas were still able to form an alliance including codeshare services with Emirates, all the while being a member of Oneworld. Can Virgin achieve a similar outcome?

Qantas are have an alliance with Air New Zealand

I agree complete with the two prior comments but I think it may be easier for Qantas as they have a lot more weight to throw around in Oneworld than virgin would have as a new member.

Think they would have joined an alliance by now if they thought it was worth it.

Interestingly Mr Scurrah do not talk about EY, which still feeds the VA network.

The real issue is the rules around alliance membership. e.g. you can't join Star and have such a close relationship with Delta because United would object, whereas joining Skyteam and there might be objections about the Singapore Airlines relationship. However, there is a growing set of very close relationships appearing across alliances, because they suit. See Cathay with the Lufthansa group (and Air NZ). Given Skyteam's woeful presence downunder, it would seem more likely that it might be keen, but what would VA gain from this? It has DL already. From Asia, Vietnam, Garuda, Korean and China Eastern are nice to have, but QF already has a tight relationship with the last of those than dilutes the value of this. It's difficult to see much value at all from the European Skyteam members for VA. So, for now, it's probably fine as it is. SQ might like it to join Star Alliance, which would open up basic alliance level reciprocity with Air NZ, but it's hard to see United not demanding the Delta partnership ending, and again what does VA really get out of join Star Alliance?

Converting Velocity Points to Kris Flyer Miles is a nasty experience. Perhaps this would improve under the correct alliance.

The “measured approach” of custom alliances has manifestly failed. What was a good mix three years ago is unravelling fast. VA should join A* or SkyTeam as fast as possible.

VA has bigger problems then Alliances whether it's branded or not. The bigger issues are Life Time Gold and not being able to get reward seating on international flights.

Whilst Paul Scurrah's comments seem very 'customer-centric', I am somewhat bemused that he fails to mention the major benefit that being in a Global Alliance should bring ie: feed and bums on seats within your domestic market.

Forget lounges, redemption and levels, the real money is in the in-bound 'feed' element. Unlike Europe, Latin America, Asia and North America, Virgin is in the very fortunate position of having only one national competitor across a large and distributed continent. Both Virgin and Qantas replicate the majority of their routes. Whilst QF has the 'pull' of oneworld, it would be unwise to underestimate the value of Virgin's disparate partnerships and the coverage that they can provide to multiple alliances.

They have the benefit of Delta (SkyTeam) feed, United indirectly (Star, because it's an indirect fit with Star partner SQ), Etihad - the EK equivalent of QF's tie-in, Alitalia and Virgin Atlantic (also SkyTeam).

It's not perfect. HNA is somewhat problematic. Perhaps this may result in a revision of Asian strategies with possibly Air China (Star) or China Eastern (Skyteam). One could also look at South Africa for Virgin partnerships (particularly ex Perth) which might involve SAA or Kenya Airways? Europe could be wide open, if some A330's were based in Singapore and or Hong Kong ie: make the SQ partnership work in terms of connectivity for VA rather than having SQ exploit all the SIN-Australian routes.

South America remains a problem for VA. However, Air New Zealand's Luxton won't be around forever and with the change in Virgin's CEO, there is a possibility of some co-operation with Air New Zealand once Luxton leaves. There is also the possibility of a revitalised Aerolineas Argentinas (Skyteam) with a new re-fleeting program re-examining it's need to expand back into the Australia / New Zealand markets.

I'd like to think that Paul Scurrah's future vision for Virgin is based on more than Australian customer benefits and that the intrinsic value of inbound feed is recognized as a primary revenue driver / builder for Virgin. There would be some tricky calisthenics, but it could be done with the 'right' agreements and without having to stretch the fleet and CAPEX too much.

World airline alliances were quite good when they started, but they have lost some of their gloss. Some carriers in the alliance only provide a basic service.... almost like a low cost carrier, particularly in the North American market, while others still offer the superior service you would traditionally expect. I think Virgin Australia should just stick to bi-lateral agreements with various airlines that serve their interest best. For example, a small airline in any given alliance operating regionally in Africa may not be that useful, whereas having one in Asia or the Pacific, much closer to us here in Australia, would be much more beneficial. By not being in an alliance, Virgin Australia can pick and chose. May be one day in the future, an alliance such as Skyteam or Star Alliance may be right for them, but for now, just stick to the bi-lateral agreements.

He's just being cheap cause Star Alliance is the better option they have the most lounges and Australia is the only place where people live or where they come to visit that is a dead zone for Star Alliance members now that Caribbean Airlines has already filled to join and they will cover the only other dead zone