SIA 'actively pursuing' additional Asian partnerships

Singapore
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Singapore Airlines is open to more partnerships in Asia, which could include equity stakes in other airlines, following last week's announcement that it will buy 10% of Virgin Australia.

"We are open to opportunities," says SIA chief executive Goh Choon Phong. "We are actively pursuing partnership opportunities in India, China and Southeast Asia."

India, China and markets such as Indonesia in Southeast Asia are increasingly viewed as key growth markets for the Singapore-based airline, which draws a large amount of its traffic from these countries.

The Star Alliance carrier made an unsuccessful bid for a stake in Shanghai-based China Eastern Airlines in 2008, but it has since kept an eye open for investment opportunities in the region.

Since then, it signed a comprehensive agreement with Virgin Australia in 2010 that has led to the airlines co-ordinating schedules and jointly marketing their services.

Last week, it received approval for its joint venture with Scandinavian Airlines that will enable the two to co-ordinate flight schedules and participate in joint sales activities. It also has partnerships with other carriers including JetBlue in the USA, Ethiopian in North Africa, and TAM and Gol in South America.

These help the airline to fill gaps in its network and compete against other partnerships, says SIA. While Star Alliance is the starting point, it has also actively pursued partnerships beyond the alliance, it adds.

SIA also owns 49% of Virgin Atlantic, a share that the carrier has been actively but unsuccessfully trying to sell for a few years.

Goh says the A$105 million ($109 million) that SIA paid for in the 10% stake in Virgin Australia cements the relationship between the two and demonstrates the carrier's commitment to the Australian market.

"We have made it very clear about how important Australia is to our network. This purchase is driven by what we feel the SIA group network requires," says Goh.

He adds that SIA is "happy" with 10% and it is not looking to increase the stake.