Is it time for Virgin to join an alliance?

[Marty_]

This is really bugging me.

For the first time, I am really discovering the limitations of being with Velocity. I am starting to travel a lot of long-haul international in J and have especially been busy booking several business trips next year.

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?

Really considering getting a status challenge from QF on this basis. Like a number of other niggles with the VA product, it seems to show a lack of readiness to handle serious frequent flyers and business travellers. Small wonder QF has the market share.

Thoughts?

 

[TomVexille]

Certainly a cost issue. Integrating computer systems and bringing an airline into alliance standards is expensive from what I've read.

 

[moa999]

But why not SkyTeam, it's just as close with some partners. And then you've got the Etihad situation.

 

[Dannyism]

dream on brah

 

[Marty_]

But why not SkyTeam, it's just as close with some partners. And then you've got the Etihad situation.

Self-interest partly. Prefer the Star Alliance members. Also, it looks like there are significantly more SA members that fly into Australia meaning more opportunities for connections.

dream on brah

Is it so remote a possibility? The Star Alliance CEO said last year that they would be keen if VA wanted to join.

 

[RooFlyer]

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.

Although it is a rather complex matrix with VA, consider it like tis: once you do figure it out, you are ahead of most, and therefore at an advantage

Its a bit like Alaskan Airlines (although I buy, not earn their miles) - a great selection of airlines to redeem on, not stuck with a particular alliance.

 

[docjames]

Some years ago I status matched to VA and at the time preferred VA for domestic travel.

But my travel is really only enough to maintain SG with one of QF or VA.

The mess of VA international partnerships pushed me back to QF.

It was time to join an alliance when they "rebranded" from Virgin blue to VA.

It's holding them back but it doesn't seem to be a priority for them. It's a shame.

 

[Dannyism]

Is it so remote a possibility? The Star Alliance CEO said last year that they would be keen if VA wanted to join.

It's like a 5 mil buy in ? 10 mil? 20 mil? Someone told me once.

 

[Isochronous]

VA will never be a serious airline or compete seriously for corporate travel spend unless it joins an international alliance.

 

[JohnPhelan]

Is it so remote a possibility? The Star Alliance CEO said last year that they would be keen if VA wanted to join.

I'm sure Star Alliance would be ecstatic! However, Borghetti is not interested in the slightest.

 

[roby]

To join either SkyTeam or Star, VA would have to forfeit at least one of their JV's which is not something JB wants to do. It did appear VA was leaning towards Star. At one point JB was even invited to Star CEO board meeting held in Queenstown. I don't know why they chose DL years ago and walked into this corner. How important is the DL alliance really? It's the only one without equity complications so perhaps has the potential of being dropped?

 

[dajop]

How important is the DL alliance really? It's the only one without equity complications so perhaps has the potential of being dropped?

Well they do need a close co-operation to/from and within the USA with someone. Would UA be willing to do that with VA? Given that VA/DL have up to 4 flights a day transpac, and VA/UA would have up to 6 flights a day, would regulators allow it?

I'm actually of the view, that maybe VA need to sort out the issues and fill some gaps (get KL/AF group onboard for Europe- rather than the meagre offerings of AZ/AB, perhaps a carrier in Latin America, and Jet Airways for India) rather than go down the alliance path.

The trouble is anyone coming from oneworld land have a utopian view of what an alliance mean with the cosy WP/FCL arrangements - in star alliance (and I think skyteam) the alliance wide benefit is effectively capped at the SG level - the WP equivalent only applies on the "home" carrier (with some exceptions for JV arrangements and the like). I know things don't always go smoothly for VA elites especially for priority boarding, seat allocation and even lounge access, but these things are far from seamless on star alliance either.

There are also some benefits (I can think of at least 2) that VA has that alliance members don't. VA elites have benefits travelling MI. Non-SQ star alliance members get nothing and when travelling domestically within the US on DL, VA WP/SG get lounge access whilst skyteam equivalent elites don't.

 

[JohnK]

In my opinion Virgin needed to join an alliance around the same time they wanted to compete with Qantas.

It's still not too late. They may pick up extra passengers connecting from Star Alliance or Sky Team flights.

 

[kamchatsky]

Right now VA does not have any more ideas. They have pretty much done what they can do with the money they got, and cannot compete with QF unless they join an alliance.

They cannot compete with QF on frequency of flights as the CAPEX would be way too high.

The only realistic one they should join is *A. Whilst Sky Team has improved a lot, most people are aware of *A due to AN days. However, I don't think they have the cash to join, and given the current alliance with SQ, SQ has no reason for VA to join *A. Likewise EY.

 

[Pleb Status]

If travelling in upper cabins, being in an alliance is not that important (if you exclude FFP/SC earn) as you generally get lounge access, extra baggage and other priority benefits provided as part of the fare. The alliance benefits really only kick in when travelling down the back of the aircraft.

It should be noted that with *A, the highest alliance level is Gold, so you do not get F lounge access and other F benefits anyway (unlike OWE).

If QF were not part of OW and asked to join OW today, I doubt they would take up that offer. They would most likely have the same loose sort of alliance with EK, AA etc that VA have with EY, SQ and DL etc.

 

[trippin_the_rift]

Certainly a cost issue. Integrating computer systems and bringing an airline into alliance standards is expensive from what I've read.

an opportunity cost more like it.
the current arrangements are great for virgin and velocity but like the OP says it's a ****ing horrible passenger experience. And this ****ty experience flows down to the bottom line as people move their spend away from VA.

I would be interested to see the customer attrition value cost combined with the extra award inventory an alliance could fill (thus increasing pax mile $ metrics and yield). Impact on market cap etc. One could make a case that the cost of not being in a real alliance outstrips that of being in one.

the airline has struggled to make any real cash over the past decade anyway so clearly something needs to change and perhaps leaving the fake alliance could be a way to change their fortunes.

problem is they have a lot of stakeholders all with different agendas so making a major change might be difficult.

 

[TomVexille]

an opportunity cost more like it.
the current arrangements are great for virgin and velocity but like the OP says it's a ****ing horrible passenger experience. And this ****ty experience flows down to the bottom line as people move their spend away from VA.

I would be interested to see the customer attrition value cost combined with the extra award inventory an alliance could fill (thus increasing pax mile $ metrics and yield). Impact on market cap etc. One could make a case that the cost of not being in a real alliance outstrips that of being in one.

the airline has struggled to make any real cash over the past decade anyway so clearly something needs to change and perhaps leaving the fake alliance could be a way to change their fortunes.

problem is they have a lot of stakeholders all with different agendas so making a major change might be difficult.

Couldn't agree more. If they had joined *A years ago, they would still have all my flying.

 

[dajop]

I am guessing star alliance would be preferred as you could then access the generous TG award inventory.

But I've got to reiterate Star Gold benefits are nothing to write home about, and the star alliance journey is far from seamless. They've never had through check baggage, I've been denied entry to lounges because computer said no (that my card had expired, even though I presented a current physical card that had not expired), and had ticket validity issues with star alliance circle type products that took an hour to resolve at Checkin.

And being VA WP will be absolutely zero advantage over VA SG if VA were in star alliance, other than when flying VA.

 

[Mr Pumblechook]

Yep Star Gold is okay but it's just that - Gold. It's not F lounges and champagne and chauffeurs - it's the KF Gold Lounge, 10% points earnings on some fares and no benefits on MI.

And something that troubled me when I had Star Gold: safety on OZ and TK.

 

[DavidFlynn]

Is it so remote a possibility? The Star Alliance CEO said last year that they would be keen if VA wanted to join.

Which is a bit like me saying I'd be keen for a weekend away with Scarlett Johansson if she wanted to – the thing is, it's not up to me nearly as much as it is to her, same goes for Star Alliance/VA

Seriously though, it's been raised time and time again over the years, and each time John Borghetti has said it's well down the list. For the moment he seems happy enough with the 'bespoke alliance' of partner airlines, either via the boardroom or JVs, but I definitely understand the appeal for travellers of the more consistent set of benefits to be found as a formal member of an alliance... and I know plenty of people who, earlier this year during the AirNZ share sell-off stoush, would have been happy for SQ to swoop in and take a majority stake in Virgin Australia and then sponsor them into Star Alliance.