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Virgin Australia currently belongs to a virtual network of partner airlines, including Singapore Airlines, Etihad and Air New Zealand. Virgin flyers can earn and redeem points with each of these partners. Velocity Silver, Gold and Platinum members also enjoy reciprocal status recognition when flying with these airlines. But some members believe that the existing arrangements have serious limitations that would be overcome by joining an alliance.
For the first time, I am really discovering the limitations of being with Velocity. Every partnership they have is different in terms of benefits, recognition, redemptions etc… And it’s doing my head in. Also hearing so many reports of patchy recognition worries me. The lure of the Star Alliance or OneWorld for seamless integration of status anywhere in the world would be fantastic. Why don’t they just join Star Alliance? Is it a cost issue?
Qantas, Virgin Australia’s main competitor, is a member of the global oneworld alliance. Given Qantas’ advantage, some members opine that Virgin will struggle to compete without also joining an alliance.
VA will never be a serious airline or compete seriously for corporate travel spend unless it joins an international alliance.
Two of Virgin’s key partners, Air New Zealand and Singapore Airlines, are part of Star Alliance. Some members believe that joining this alliance would therefore be a logical step. But joining the SkyTeam alliance would also be a possibility.
There are a range of benefits involved with joining a global airline alliance. One advantage is a much better passenger experience. Velocity members would have access to a greater network when travelling overseas, and status would be recognised consistently across all partner airlines. This would greatly add to the appeal of the Velocity Frequent Flyer program. Membership in an alliance would also attract more passengers towards Virgin Australia, and more reward seats would likely be filled by passengers using points from across the alliance’s network of airlines.
However, it seems Virgin Australia CEO John Borghetti is not interested in joining an alliance. One likely reason is the high cost of joining. In addition to the joining fee payable to the alliance, which can cost millions, the airline’s signage, branding and computer systems would also require a costly upgrade.
Certainly a cost issue. Integrating computer systems and bringing an airline into alliance standards is expensive from what I’ve read.
Some speculate that if joining Star Alliance, Virgin may also need to terminate its joint venture with Delta Airlines, a SkyTeam member. Virgin currently partners with Delta on flights to the United States.
At this stage it appears unlikely that Virgin Australia will join a major alliance in the near future. But at least some members are happy with the current arrangements.
I like the current situation. I like having a ‘non conventional’ set of partners that I can book using my domestic generated points. If I want to redeem on Star Alliance, I convert my Velocity points into KrisFlyer ones and book from there.
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