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SIA, Virgin apply to renew alliance, flag use of data analytics to enhance customer experience

written by | June 24, 2016

Singapore Airlines and Virgin Australia.

Singapore Airlines (SIA) and Virgin Australia say they will develop systems to better recognise their high value guests travelling on each other’s networks as they seek a 10-year reauthorisation of their alliance.

In their application to the Australian Competition and Consumer Commission (ACCC) to renew their alliance, which was lodged in May, SIA and Virgin flagged the use of data analytics to offer an improved customer proposition and services to customers, helping increase passenger numbers and earned revenue.


“Over the next period of reauthorisation, the Applicants intend to work to further enhance the benefits available to high value and elite members, such as the implementation of automated high value guest recognition with reciprocal frequent flyer status automatically populated in various systems,” the application to the ACCC said.

“This will allow passengers to more easily accrue status benefits and be prioritised during disruptions. This will further enhance the Alliance’s seamless travel proposition for guests across both airlines.”

The ACCC first authorised SIA and Virgin’s alliance in December 2011 for a five-year period. The partnership offered 124 codeshare destinations under their alliance covering Australia, Asia-Pacific, Europe and South Africa, and involved coordination on pricing and revenue management, sales, distribution and marketing, as well as purchasing and procurement.

There were also reciprocal frequent flyer benefits such as priority boarding, priority checkin and priority luggage. Members of Virgin’s Velocity frequent flyer program and SIA’s KrisFlyer were able to earn and redeem points on eligible Virgin, SIA and Silkair flights.


The airlines’ application said the alliance had resulted in a 30 per cent increase in frequencies on Australia-Singapore routes and a 12 per cent rise in available seats from calendar 2011 to calendar 2015.

There were also new routes, including Silkair’s Singapore-Darwin and Singapore-Cairns services, while Virgin has boosted frequencies to SIA’s Australian gateways Adelaide, Brisbane, Melbourne, Perth and Sydney. And SIA is scheduled to commence Singapore-Canberra-Wellington flights from September.

The application said SIA and Virgin would focus on growing capacity on existing routes through using larger aircraft and adding extra frequencies in line with market demand.

“The alliance has been successful in a highly competitive environment, resulting in significant commercial benefits for the applicants and valuable public benefits,” the application said.

“Reauthorisation will enable the applicants to continue to provide a compelling joint offer to both leisure and corporate passengers in competition with Qantas and its alliance partners.”

“Going forward, the applicants will be able to provide passengers with more destinations and frequencies and better products, leading to a further increases in choice and competition in the relevant markets.”

The application said the alliance had helped Virgin and SIA better compete against Qantas, particularly in terms of corporate accounts. However, figures highlighting the increase in revenues from corporate and government customers, as well as the number accounts won and retained, over the past five years were redacted in the public version of the application.

“Singapore Airlines has seen substantial revenue growth over this period as a reflection of the acquisition of such corporate accounts,” the application said.

“Virgin Australia’s earned revenue has grown significantly over the last three years as a result of this growth in corporate accounts.”

The application said the top five beyond gateway destinations in Australia for SIA passengers were the Gold Coast, Hobart, Canberra, Ayers Rock, and Townsville. Meanwhile, Virgin Australia passengers’ the top five connections beyond Singapore were London, Delhi, Phuket, Ho Chi Minh City and Mumbai.

Separately, SIA and the Lufthansa group of airlines (Lufthansa, Swiss and Austrian) have lodged their application to the ACCC for authorisation to coordinate prices, sales, marketing and inventory management for services between European markets of Germany, Austria, Belgium and Switzerland, and Asia-Pacific markets of Singapore, Australia, Indonesia and Malaysia.

The two carriers also planned to coordinate networks, scheduling, inventory management, as well as share revenue, on their nonstop flights between Singapore and Munich, Frankfurt and Zurich. They have requested an authorisation for five years.

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