SIA / Tiger: has received initial approval from Australia's competition reguator for an alliance with Virgin Australia. Under the terms of the alliance, the 2 airlines will cooperate on their Singapore to Australia services and connecting international and domestic routes, including joint pricing and scheduling.
This is positive for SIA, which has long wanted to expand its flight frequencies into Australia. Recall SIA has met with several failed attempts to secure transpacific routes via Australia.
Such a move also allows SIA to diversify its bets with regard to the Australian domestic market. Recall, SIA owns 22% of Tiger Air (pre-rights). Tiger’s Australian unit, which competes directly with Virgin, was temporarily suspended from flying in Aug due to safety issues, and is still trying to rebuild its customer base and reputation.
This spells more uncertainty for Tiger Air in Australia, and one wonders if this could be a precursor for its exit from Australia should the budget carrier not be able to turnaround its Australian operations.
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