Star Alliance identifies Australia as white spot

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roby

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If you have been following the various interviews from Star Alliance executives, you would know that Star usually only referred to India and Russia as remaining white spots. When asked about Australia, they would never say it was a white spot. They would usually say all its international airports were effectively covered by members. Over the last year, they have gained Air India but lost Tam. According to this article (in Portuguese), Star now identifies Brazil, Russia and for the first time Australia as white spots and they are trying to fill the blanks.

Mercado e Eventos | Notícia > Mais um membro: Azul é principal aposta para integrar Star Alliance

This may be nothing to you but I sense a very obvious change of tones. With VA refusing to participate in Etihad Partners and the introduction of points conversion to SQ, can we read between the lines that Star and VA have the potential to start conversations? VA continues to push back long range aircraft orders which means they will need more partners and destinations to raise their profile to effectively compete with QF and oneworld in long haul routes.
 

moa999

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Personally I don't see it.
Virgin Australia also has a close relationship with Delta (skyteam) and as noted with Etihad along with its ownership stake.

With only two domestic airlines groups, it is much better sitting in the middle and getting feed off both star and skyteam.

Would not be surprised if the SQ points transfer deal also results in something similar with NZ or EY.
Mind you we are yet to see the terms of the SQ deal.
 

TomVexille

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I would love to see VA join *A. But I'm not overly hopeful even though I repeatedly see people post about how they remain loyal to QF due to the OneWorld network and consistent status benefits.
 

vantage03

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I'd also LOVE to see VA join *A however JB himself is constantly out there saying it's not going to happen. If memory serves he's said the model no longer works and creating a network of strategic partners (a la EY, SQ, NZ, DL) is the way forward.
 

TomVexille

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I'd also LOVE to see VA join *A however JB himself is constantly out there saying it's not going to happen. If memory serves he's said the model no longer works and creating a network of strategic partners (a la EY, SQ, NZ, DL) is the way forward.

It may be the way forward. But until they can negotiate a consistent or better set of benefits for their FF members it will lag behind the traditional alliance structure.

I get that they can choose to work only with airlines that they want to. But it leaves some rather large gaps.
 

dk4

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Virgin Australia also has a close relationship with Delta (skyteam)...
And importantly - a failed former relationship with United (Star Alliance).

I get that they can choose to work only with airlines that they want to. But it leaves some rather large gaps.
"Commercially" it leaves VA partnered with true partners, unlike QF which is left allied to many of its competitors!
 

roby

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And importantly - a failed former relationship with United (Star Alliance).

How long ago was that? Both have had new management.

"Commercially" it leaves VA partnered with true partners, unlike QF which is left allied to many of its competitors!

VA will not have the same problem as their long haul routes are very limited so they won't have many competitors to start with.

I suppose the reason why QF has not left oneworld is because the alliance reach is too valuable to their FFP which is one part of the business that's making money. The recent part sale of the Velocity program may have triggered the same thinking.

The point I was trying to make is that Star CEO would not be openly talking about Australia if he didn't think the only viable choice from this country VA was not a potential candidate and they did not think they had a chance.
 

AustraliaPoochie

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About 12/18/24 months back, I wrote a letter to JB and he at that time, said that there were no plans for VA (VB) at that time to join *A.
I would one day love to visit BKK with TH via SYD, rather than going SQ via SIN.
If VA joined *A, it would help in my VA points collecting.
On the lower fares, SQ allows VA VR members to earn only 10% of mile flown.
 
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I'd also LOVE to see VA join *A however JB himself is constantly out there saying it's not going to happen. If memory serves he's said the model no longer works and creating a network of strategic partners (a la EY, SQ, NZ, DL) is the way forward.

I have no idea personally, but that last statement sounds like rhetoric for them not being able (for whatever reason) to join a real alliance. Their cobbled together partnership is better than none (obviously), but it does appear to be deficient when compared to OW or *A. It'd be interesting to hear the real reason why VA chose the path they have gone down.......possibly it was the only path at the time?
 
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Mattg

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I think oneworld is a big positive for QF. Certainly from a customer perspective, being in oneworld keeps me loyal to QF at home, and when overseas it's nice to be able to get reciprocal status benefits on other oneworld airlines almost anywhere in the world. VA's partners don't cover nearly as much of the globe as the major alliances. I'm surprised VA wouldn't want to be a part of an alliance, especially when Star Alliance has a gap they could fill perfectly. They already have close ties with SQ and NZ (in star alliance)..
 

Supersonic Swinger

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Whilst individual FFers may want to have VA join one of the three alliances, from the airline's perspective it's a cost vs benefits analysis, and has to be:

- how much additional network revenue do you get from the alliance versus how much do you lose from other sources, as well as the not insubstantial costs of membership
- joining an alliance means that your ability to partner with out-of-alliance airlines can be restricted. VA currently partners with airlines in all three as well as non-aligned carriers, and I understand Star Alliance is the most restrictive of the three in this respect
- joining an alliance reduces an airline's flexibility to adjust to changing circumstances. Air Berlin certainly wouldn't join OW now given how it's business landscape has changed in the last three years since joining. I've also read that Star Alliance charges the largest exit fee to airlines wanting to leave of the three alliances.
- alliances were a 1990's answer to the problems of the airline industry. They haven't proved to be the panacea they were expected, and this is seen by all three alliances struggling with member cooperation - as dk4 said, you're allied with competitors, not partnered with partners.

The marginal incremental revenue which some FF members might generate because of alliance membership certainly doesn't outweigh the above.
 

roby

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The marginal incremental revenue which some FF members might generate because of alliance membership certainly doesn't outweigh the above.

I don't know if this is true. NZ did a study about 2 years ago which clearly indicated that they were better off being in the alliance. Expensive exit fee is not the reason why alliance members are not leaving.
 

Supersonic Swinger

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I don't know if this is true. NZ did a study about 2 years ago which clearly indicated that they were better off being in the alliance. Expensive exit fee is not the reason why alliance members are not leaving.

It will be only one factor which an airline will have to take into account and will depend on their airline. I read analysis on CAPA that Air Berlin joining OW had only increased their network revenues by about 2%, which given the scale of their business problems has meant little and somewhat hinders them now.

On balance, Virgin have decided for the moment that they don't need to join, and can cherry pick partnerships, much like Alaska does in the US.
 

Mattg

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It will be only one factor which an airline will have to take into account and will depend on their airline. I read analysis on CAPA that Air Berlin joining OW had only increased their network revenues by about 2%, which given the scale of their business problems has meant little and somewhat hinders them now.

I'd be interested to have a read of that report. FWIW Airberlin being in oneworld has got them quite a bit of business from me personally which they probably wouldn't have got otherwise.
 

Supersonic Swinger

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I'd be interested to have a read of that report. FWIW Airberlin being in oneworld has got them quite a bit of business from me personally which they probably wouldn't have got otherwise.

Unfortunately, after a week, CAPA's online articles are only available to members. But if you are interested in the airline industry, it's worth checking as they have new analysis up each working day. Usually more in-depth than is usually reported in the financial press, and they'll sometimes run articles on topics other than airlines, like airport privatisations or the state of the airline alliances.
 

maninblack

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VA not being a member of a coherent alliance is a big negative for me and even when I was a bit excited about VA amounting to something I still stayed involved with Oneworld internationally and am (for various reasons) now being drawn back to Qantas.
 

Mattg

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Unfortunately, after a week, CAPA's online articles are only available to members. But if you are interested in the airline industry, it's worth checking as they have new analysis up each working day. Usually more in-depth than is usually reported in the financial press, and they'll sometimes run articles on topics other than airlines, like airport privatisations or the state of the airline alliances.

Thanks, I'll have a look into this.
 

RooFlyer

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Interesting analogy to Canada. They too have one large airline, belonging to an Alliance (Air Canada/Star Alliance in that case0, and a second, smaller but growing airline, NOT in any Alliance - WestJet.

WestJet effectively can't join an alliance as they are steadfastly against the type of FF schemes that requires. But they do codeshare with a bunch of other airlines (most recently with Qantas). You could call them a bit promiscuous.

Alaskan Airways is a bit the same.

So virgin code-sharing extensively with Star Alliance would merely be following a well trodden path. Although they might argue that they are the 'natural' home for StarAlliance flyers within Australia, so why have the hassle of a code-share?
 
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