Singapore Airlines and Virgin Blue: a good fit?

[Cabbage]

Just a thought...SIA should be considering buying a large stake in Virgin Blue.

The way I see it, could have many benefits for both companies, namely:

• A DJ (full service)/TT (no frills) combo would be far more effective in combating the QF/JQ monster than DJ trying to be all things to all people, as it currently appears to be trying to do

• Would allow DJ to extend the "Virgin" brand to V Australia, Poly and Pacific Blues, which it is currently unable to do due to contractual obligations with VX shareholder SIA. Current multi-branding strategy is confusing and would be costly to maintain

• Would give SIA its long desired presence on the pacific route (albeit in Virgin colours)

• Operational effeciencies between the two carriers, resulting in significant cost savings (particularly for DJ)

• Although share price has recovered significantly over the last few months, historically speaking, current DJ share price could be considered a cheap buy

Plausible, or pie in the sky?

 

[brett-au]

Judging from your post time, I can see this has been keeping you awake.

Here's another option.

AU-NZ sign an open skies agreement (if they haven't already).

Virgin Blue teams with Delta and Sky team
Air New Zealand expands Zeal 320 and starts flying SYD-MEL, SYD-BNE, etc to compete directly with Qantas's full service.

SQ is happy to feed in to NZ and not compete with a LCC, people can earn *A points in Australia, and Air NZ takes over from Anset / United (with a stop over in Auckland/Christchurch).

It does however damage Qantas quite badly.

 

[samh004]

It does however damage Qantas quite badly.

But it could be the kick up their butt they so badly need. And real competition would be great, finally.

 

[dajop]

Would allow DJ to extend the "Virgin" brand to V Australia, Poly and Pacific Blues, which it is currently unable to do due to contractual obligations with VX shareholder SIA. Current multi-branding strategy is confusing and would be costly to maintain?

If DJ want to move upmarket, the better strategy might be to do a gradual transition to the V Australia branding. How many times have you heard "there's no way I'd fly Virgin Blue, I don't like the immature staff and there jokes, and they're basically just a low cost carrier on steroi_s..." or the like ... even though the reality in 2010 is vastly different to say 2003, they still carry that baggage, so to speak.

I think SQ have had quite a few less than successful ownership plays in foreign carriers (NZ, VS, and others) that they would be wary with any DJ play.

 

[Cabbage]

If DJ want to move upmarket, the better strategy might be to do a gradual transition to the V Australia branding.

Except...any name with the word "Australia" in it wouldnt be appropriate for the the south pacific services.

 

[cove]

Cabbage have you been reading my mind about a tie up?
VBA shares at 30 cents,a 25 per cent shareholder who would only tip in fresh money at 20 cents,a market share of 30 per cent plus and finally high turnover of about 20 per cent in a week equals.......
Australia would be the winner if ACCC set the rules properly.