SQ buys part of Virgin Australia

[SQtraveller]

post deleted

[CarbonMan]

SQ buys part of Virgin Australia

http://www.channelnewsasia.com/stori...234242/1/.html

SYDNEY: Virgin Australia on Tuesday said it has sold a 10 per cent stake in the company to Singapore Airlines for A$105 million (US$108 million).

The Singaporean carrier paid 42.88 cents a share for an issue of 245.6 million Virgin Australia stock, a 6.8 per cent discount to their last trade of 46 cents.

The airline joins Etihad Airways which also has a 10 percent stake in Virgin.

"Singapore Airlines is an important strategic alliance partner of Virgin Australia and we are very pleased to have their support as an investor," Virgin chief executive John Borghetti said in a statement.

"We believe this investment demonstrates their confidence in our strategy and it enables Virgin Australia to fast track its growth plans."

News of the Singapore deal came as Virgin Australia announced it had bought a 60 per cent stake in low cost carrier Tiger Airways Australia for A$35 million.

[CarbonMan]

Please delete this thread. SQtraveller beat me to it.

[9V-SIA]

SQ buys 10% of Virgin Australia ( Etihad other significant shareholder )

Virgin Australia buys 60% of Tiger Airways Australia.

What's happening?

[259850]

SQ buys 10% of Virgin Australia ( Etihad other significant shareholder )

Virgin Australia buys 60% of Tiger Airways Australia.

What's happening?

A good deal for all. Tiger Airways no longer has to consolidate or manage a poorly-run Australian subsidiary. Tiger Airways Australia will get international routes since it will be considered domestically owned. Virgin Australia gets a budget brand to compete against Jetstar. Someone has to pay for it to make it all work - and that's SQ.

SQ should consider being more involved in Tiger Singapore's operations - perhaps hiving off more low-yielding MI routes to Tiger and jointly marketing/branding Scoot and Tiger. Tiger should also benefit from SQ's ability to "squeeze" Airbus on its aircraft purchases. The LCC boom is real from what I can see. In 5-10 years, some of the routes SQ/MI operate on now may only be profitable if operated on an LCC model.

[MAN Flyer]

QF start an LCC based in Singapore and open an increasingly large network from Changi which affects SQ's home base market. SQ start a Tiger operation in Australia which affects QF's home, and pretty lucrative, domestic market.

QF announce the intention of starting an 'up market' short haul carrier to operate regional flights, presumably based in Changi and therefore clearly going after SQ's pax, before it was (temporarily or otherwise) shelved. SQ now buy a stake in QF's biggest domestic rival.

You can't help wondering if both SQ and QF would be in better positions if none of them had bothered with all this and the hassle that comes with it, and instead concentrated on their core business including not p*ssing off a sizeable chunk of their own previous frequent flyers....

[Kyo]

Or SQ could have just spent their money on folks who knew about buying a proper website and actually earning income.

Better yet, sticking with the old one.

[Sethor]

QF start an LCC based in Singapore and open an increasingly large network from Changi which affects SQ's home base market. SQ start a Tiger operation in Australia which affects QF's home, and pretty lucrative, domestic market.

TT has not affected QF's domestic operations it competes with JQ even then it is a very small airline (TT's 11xA320 vs. JQ's 51xA320, 6xA321 & 11xA332). TT has a very poor image in Australia & then the CASA groundings did not help. I wonder who at TT thought the Airways TV show was a good idea, it makes them look like FlyLo off Come Fly With Me. SQ are smart in offloading TT shares it has never turned a profit & most likely never will.

[floppy]

SQ should consider being more involved in Tiger Singapore's operations - perhaps hiving off more low-yielding MI routes to Tiger and jointly marketing/branding Scoot and Tiger. Tiger should also benefit from SQ's ability to "squeeze" Airbus on its aircraft purchases. The LCC boom is real from what I can see. In 5-10 years, some of the routes SQ/MI operate on now may only be profitable if operated on an LCC model.

Part of you say will happen - Enhanced Scoot/Tiger network tie-up: http://www.ttgasia.com/article.php?article_id=4721

Part of it won't. When the LCC came, speculation was that MI would fold (or at least become a LCC). Instead, I believe SQ/MI has a certain niche in the marketplace that enables MI to become (even more) profitable (at least, their annual results certainly says so). The threat to SQ/MI would most likely come from similar tie-ups: TG/Thai Smiles, MH/Project Sapphire (abandon?), QF/unnamed carrier (abandon?) and CX/KA.

[MAN Flyer]

TT has not affected QF's domestic operations it competes with JQ even then it is a very small airline (TT's 11xA320 vs. JQ's 51xA320, 6xA321 & 11xA332). TT has a very poor image in Australia & then the CASA groundings did not help.

I couldn't disagree with any of that, but Tiger was definitely intended as a spoiler, whether to QF mainline or just JQ.

They're as bad as each other.

[B727]

QF start an LCC based in Singapore and open an increasingly large network from Changi which affects SQ's home base market. SQ start a Tiger operation in Australia which affects QF's home, and pretty lucrative, domestic market.

I think both SQ and QF need to consider their return on investment strategy wisely. A lot of this tit for tat can easily get our hand and have each carrier excessively tied in to the other's home market while ignoring other markets.

I remember I spent a hilarious couple hours at the SYD SKL F two years ago while waiting for a delayed WhaleJet one Sunday morning.

I watched an EK WhaleJet land followed by a TG A346 and an MH 744--all this interspersed with several little Tiger Airways planes taking off! It was ironic to see the little tigers taking whilst waiting for one bloated golden goose (or as I call it, golden barramundi seriously, have y'all noticed the shape of the A388, especially the head) to arrive

[RHG]

Actually, jetstar chose to base its asian operations out of sin due to the QF link in SIN. They did try to expand it obviously to SQ's objections and obviously something, something probably happened behind the scenes together with domestic events.

I seem to recall a comment from a poster above who posted previously that LCC divisions of SQ and the like was to maintain revenue/customer base. Now this same poster now appears to be saying these traditional airlines shouldn't have been worried in the first place.

As for LCC gaining movement, it is not without pains such as below.

http://www.smh.com.au/travel/travel-...101-28m0q.html

As for SQ allocating their resources elsewhere, as policy, the airline has always maintained it intends to focus solely on the business segment due to higher profit margin which until a few years ago excludes the leisure customer and its home base. If they don't screw you on the website issues, they will find some way to screw you over.

[9V-JKL]

And buy somemore...

Singapore Airlines has agreed to acquire another 9.9% of Virgin Australia in a move that will increase its stake to 19.9%.

http://www.singaporeair.com/jsp/cms/...s/ne130424.jsp

[JonLee]

Well, looks like QF needs to do some serious planning to overcome this