Virgin Australia opts for Darwinian selection

   

Virgin Australia has given a glimpse into its future strategies this morning in announcing a joint move on Darwin with Singapore Airlines’ full service regional subsidiary Silk Air and an increase in its domestic services to the city aimed at both leisure and resources industry travellers.

From 26 March Silk Air will start four times weekly services between Darwin and Singapore, while on 2 April Virgin Australia will add new daily flights between Sydney and Darwin.

Singapore Airlines and Virgin Australia also announced that their frequent flyer program reciprocity would begin on 20 December, although awkwardly in the fine print, Silk Air is not part of this arrangement for the time being.

Darwin has been under served by Virgin Australia and its Virgin Blue predecessor, in part according to internal lore, because the NT government once shopped early proposals for winning some of its account business to Qantas, using the Virgin Blue offers as a bargaining lever, and during the time that current CEO John Borghetti was a group executive general manager at Qantas.

But, all is unfair in love and war when it comes to winning corporate accounts, and the issue now is that Darwin is a thriving growth centre for Qantas and Jetstar, with the latter’s turbulent relationship with the private owners of the Darwin’s passenger facilities on what is a military air base not stopping it’s ambitions to use Darwin as a cross-over point between its Asian and domestic franchises.

It seems obvious that while Qantas seems focused more on growing its low cost Jetstar franchises than its full service brands, a pincer movement by Singapore Airlines Silk Air branch and Virgin Australia on Darwin is going to require Qantas to defend its premium business travel interests in Darwin from a serious challenge.

The days of Qantas expecting Darwin business travellers to use Jetstar for any of its connection suggestions to Singapore to transfer to or from its full service European flights are numbered. Try booking Qantas to Singapore from Darwin and it expects customers to go there via southern capital cities. It turns a simple 4 hour flight into an epic, which we might assume no one ever actually endures.

But going strong on Darwin is likely to require Virgin Australia to secure more of the Australia-Indonesia market, which it will have to do on its own, and where Jetstar has already made some inroads from Asia as well as Australia.

One Comment

  1. 1
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    Posted December 13, 2011 at 1:13 pm | Permalink

    I am quite certain Qantas will not try to compete. They will roll over, cry poor and let the market dwindle until it dies. Qantas has to make stupendous profits to stay on a route. Jetstar just has to nearly break even.

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