Virgin Australia, Qantas Rivalry Intensifies for Asian, European Routes

  @ibtimesau on

The competition between Qantas Airways and Virgin Australia further heats up as the latter unveiled today plans to secure more service routes to Europe via the code sharing arrangement the airline had earlier inked with Singapore Airlines.

In the application that the Richard Branson-owned carrier had lodged before the International Air Services Association (IASC), Virgin aims to take advantage of its alliance with Singapore Airlines through code shares on routes that service Australia-Singapore-Paris and Australia-Singapore-Amsterdam.

Virgin said that it requires 400-seat allocation to last for at least five years and should be fully realised by March 2013.

The airline, which has been ramping up its efforts for a head-on collision with the international, regional and domestic routes currently covered by national carrier Qantas, gave its assurance to the IASC that a green light on its plea would not prevent the company from going ahead with a previous code sharing deal with Etihad.

Etihad and Virgin had recently agreed to code share on the Australia-Abu Dhabi-Paris route, which analysts said served as a precursor to Virgin's increasing attempts to directly challenge Qantas, already dogged by labour strife, stiff rivalry and dwindling revenues.

The new routes being sought by Virgin was on top of the Australia-Singapore and Singapore-Australia that it decided to code share with Singapore Airlines, which was announced yesterday.

The move will see Virgin's partner increasing its flights from Australia to 112 by year-end, which also include Singapore Airlines' regional carrier, SilkAir, which services destinations going to Darwin.

To date, Singapore Airlines, on the strength of its partnership with Virgin Australia, serves five Australian airports, including Sydney and Melbourne, according to a Tuesday report by The Sydney Morning Herald.

Singapore Airlines regional vice-president Subhas Menon said in a statement yesterday that much of the increased capacity of the carrier for the current will be focused on China and Australia, the latter will be serviced by two A380s and more will be added when required.

"We see both of those markets as growing in terms of prominence in our network, as well as areas that we have identified as future growth centres," The Herald reported Mr Menon as saying in the statement.

The new development came up as Qantas sought last week the assistance of Canberra, asking for intervention that would allow the struggling carrier to level the playing field as it bemoaned onslaught of competitors that were backed by heavy cash and limitless options.

On its part, Qantas claimed that limitations on its charter, as determined by the federal government, ties the hand of the company and prevents it from attracting investors or partners, who apparently were turned away by caps regulating foreign ownership on Qantas.

However, The Australian reported today that Qantas may have gained some breathing room today via a possible inroad in the South American market, which was made possible by the alliance secured with Chile's premier carrier, LAN.

Qantas has also an existing collaboration with Air France, which operates mainly in Europe and the Americas, and is currently pursuing an appeal before the IASC for the regulator to re-allow its code sharing deal with South African Airways, the News Ltd publication said.

Join the Discussion