Will Virgin Australia join SkyTeam? Don’t count on it…
An alliance tie-up has always been well down on the airline’s to-do list.
By David Flynn, September 28 2022
Virgin Atlantic’s overnight announcement of plans to join the SkyTeam alliance quickly set speculative tongues wagging on the likelihood of Virgin Australia doing likewise.
But as alluring as Virgin Australia joining SkyTeam might be, there are several reasons that’s not about to happen.
First of all, Virgin’s focus is firmly fixed on bedding down its strong domestic position as a true Qantas challenger and an appealing choice for travellers, while keeping the bottom line sharp and in shape for a relisting on the ASX.
“We’re very focused on running the business and making sure that we’re in great form for eventual listing,” CEO Jayne Hrdlicka remarked at an aviation conference in Adelaide earlier this month – and it’s questionable how much of a boost joining SkyTeam would offer at this point.
Potential alliance membership for Virgin Australia, either SkyTeam or Star Alliance, has been a question stretching back to the days when John Borghetti was CEO – and even then, Borghetti several times attested it simply wasn’t a priority.
“You never say no to anything forever, but I just don’t see the merit in it and I don’t see what we would gain,” Borghetti told Executive Traveller back in March 2014.
Then as now, Virgin’s focus was on weaving together its own take on an alliance through a bespoke collection of international partners.
And Virgin’s done that incredibly well. For flights to Asia and the rest of the world it has Singapore Airlines and ANA, with United Airlines and Air Canada for the Americas – yes, all Star Alliance members – while Oneworld’s Qatar Airways and unaligned Etihad Airways bring their own Gulf-centric global networks to the table.
And of course, Virgin Atlantic sits proudly on that roster.
So while alliance membership doesn’t rule out partnerships with airlines outside the family, it’s arguable where Virgin Australia would really benefit from the SkyTeam portfolio.
Virgin Australia - Velocity Rewards
22 Aug 2013
Total posts 171
What would be the down side for VA were it to join an alliance?
20 Nov 2015
Total posts 478
The up-front cost of getting IT systems aligned, which I'm told is pretty complex (depending on what system Virgin already uses of course) plus on-going membership fees and the 'cost' of redeemed reward flights, and then the general 'cost' of having this big project on the plate which can just distract from the core job, and that seems very much Bain's thing too. Seems that SkyTeam just doesn't have enough actual benefits to make all that worthwhile. It's sort of like investing $1000 to make $10 profit, does it really make sense?
Qantas - Qantas Frequent Flyer
08 Mar 2022
Total posts 13
I could see the SkyTeam play if Delta were still a partner.
If VA wants to drive home the value prop for frequent flyers to switch from QF they'll join Star Alliance. Beyond the United tie up and Singapore history, getting closer to Air NZ for AKL - JFK flights for example makes sense. Redemptions across the Star Alliance network have also been fantastic in my experience as compared to QF - simplified FF recognition will go a long way with Star Alliance Gold for consistent lounge policies, upgrade bids etc.
QF
11 Jul 2014
Total posts 1010
Not now, there is a new world order which Qatar has started and VA are friends to all airlines.
Virgin Australia - Velocity Rewards
24 Jan 2018
Total posts 767
I realise its early days, but are there any readers* who've personally been a consumer-beneficiary of the VA-UA alliance yet?
*If employees and consultants to VA2 and UA feel compelled to reply, please identify that 'conflict'.
09 Jun 2017
Total posts 30
I hope they don't join Skyteam. The most boring and less atractive Alliance especially for Australian travellers.
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