Singapore Airlines in partnership with Virgin Australia

Singapore Airlines and Virgin Australia on Tuesday announced a long-term partnership that will boost their global reach despite the exclusion of the lucrative Australia-US sector. "The alliance will connect Singapore Airlines' extensive international network with Virgin Australia's wide range of Australian and Pacific destinations," the two carriers said in a joint statement. They will share flights, coordinate schedules and undertake joint sales and marketing programmes. The tie-up, announced on the sidelines of a global aviation industry conference in Singapore, will take effect on August 1 if approved by regulators.

The deal has one notable exclusion -- the highly competitive trans-Pacific routes from Australia to the US West Coast that Singapore Airlines has so far been denied by the Australian government. But the two airlines said they were confident the alliance would boost their revenues significantly. "We don't have a specific figure right now, but as you can see, the value proposition speaks for itself," Singapore Airlines chief executive Goh Choon Phong told a news conference. "You can see the potential is really quite immense, both currently as we cooperate and going forward."

Goh hopes the tie-up will boost Singapore Airline's chances of eventually convincing Canberra to allow the Singapore carrier access to the trans-Pacific routes. "I think with greater cooperation, certainly it will strengthen our case," he said. Julius Yeo, an aviation analyst with financial consultancy Frost and Sullivan, told AFP the alliance takes Singapore Airlines one step closer to its dream of competing on the trans-Pacific route. "It's a step forward in penetrating the Australian network. Singapore Airlines has always been very keen on Australia. It's a staggered strategy to target the trans-Pacific route," Yeo said.

The move is the second major business announcement by Singapore Airlines, one of the world's most profitable carriers, in two weeks. On May 25, it said it will create a long-haul budget airline to tap growing Asian demand for no-frills travel to places like Europe, but details have not yet been unveiled. Singapore Airlines announced in May a profit of Sg$1.09 billion ($885 million) in the year to March on revenues of Sg$14.5 billion, but analysts say the airline is under pressure in its traditional core of first and business class travel.

Through the new tie-up, Virgin Australia will have access to about 70 more destinations, while Singapore Airlines customers will have access to about 30 extra routes, the statement said. Virgin Australia group chief executive John Borghetti said Asia was "a critical market" and Singapore Airline's extensive network "will be particularly attractive to our international business and leisure travellers." The airline, formerly known as Virgin Blue, already has a partnership with US carrier Delta on trans-Pacific flights as well as an alliance with Etihad Airways of the United Arab Emirates.

In 2010, New Zealand and Australia approved an alliance between Virgin Blue and Air New Zealand on trans-Tasman routes. At Tuesday's news conference, Goh said Singapore Airlines was still open to offers for its 49 percent stake in British carrier Virgin Atlantic. The Singapore carrier paid 600 million pounds ($981 million at current rates) in 1999 for the 49 percent stake in Virgin Atlantic, which was started by flamboyant British tycoon Richard Branson in 1984. Singapore Airlines has said its investment in the British carrier was not producing the sort of returns it was expecting. Branson has a 26 percent stake in Virgin Australia, a company spokeswoman said.

Boom in Asia creates a shortage for pilots!

Cathay Pacific Airways Ltd., Qantas Airways Ltd. and Emirates Airline are awaiting deliveries of about 400 planes to capitalize on Asia’s rising prosperity. Finding pilots is the next job.
Boeing Co. expects the region’s carriers to be the biggest buyers of twin-aisle planes as travel grows in China and India, home to a combined 1.1 billion middle-class people. Asia-Pacific airlines will buy about 8,000 planes worth $1.2 trillion over the next 20 years, Airbus SAS said. Airlines worldwide need an average of 49,900 pilots a year from 2010 to 2030 as fleets expand, yet current training capacity is only 47,025, according to the International Civil Aviation Organization in Montreal. That is sparking bidding wars as Emirates offers tax-free salaries and four-bedroom villas for captains, and AirAsia Bhd., the region’s biggest budget airline, gives tuition-free training. “It’s a major issue and will be a big challenge to the industry’s growth,” said Binit Somaia, a Sydney-based analyst for the Centre for Asia Pacific Aviation. “Even if you can find the pilots, you have to pay top dollar for them because they are so scarce.”

China, the world’s fastest-growing major aviation market, likely will account for a third of the region’s orders, Airbus, the world’s biggest aircraft maker, said in February. Its economy will grow 10.5 percent this year, compared with world growth of 4.6 percent, according to International Monetary Fund estimates.
India, with estimated growth of 9.4 percent this year, may overtake China as the world’s fastest-growing major economy as early as 2013, according to Morgan Stanley.
This year, the region’s carriers ordered 133 commercial jets with more than 100 seats, or 23 percent of the global total, according to Ascend Worldwide Ltd., a London-based aviation forecaster and data provider.
“There will be a shortage of pilots, and this is going to last for a while because it takes time to produce a good pilot,” said Elmer Pena, president of the Airline Pilots Association of the Philippines.
Philippine Airlines Inc. canceled flights in July and August and rebooked passengers after losing 27 pilots to higher paying jobs abroad.

The demand in Asia contrasts with the 4,500 U.S. airline pilots on furlough, according to figures compiled by Kit Darby, a retired United Airlines pilot now running an Atlanta-based consulting firm.
That situation shouldn’t last long. The global fleet of cargo and large passenger planes will double to nearly 32,000 by 2028 from 15,750 last year, according to Airbus.
The major U.S. airlines are expected to hire more than 40,000 pilots in the next 12 years, said Louis Smith, president of FltOps.com, which provides career counseling services and sponsors job fairs.
World passenger traffic is expected to increase an average of 4.7 percent a year between 2009 and 2028, according to Airbus.
Emirates is the largest Arab airline with more than 200 planes on order. It aims to recruit 250 pilots this year and double that number in 2011, it said in a statement.
The company, which needs more than $28 billion through 2017 for expansion, sought to recruit in Houston, Madrid and Singapore.
Cathay Pacific, Hong Kong’s biggest carrier, will recruit 1,000 people, including crew, Chief Operating Officer John Slosar said. PT Garuda Indonesia placed a newspaper advertisement last month seeking pilots “fluent in English and of good character.” Jetstar, the budget arm of Qantas, plans to recruit 120 more pilots by next summer.
Singapore Airlines Ltd. and AirAsia, based near Kuala Lumpur, set up their own tuition-free training academies. Singapore Air’s flying college graduates about 150 cadet pilots a year, while AirAsia’s facility trains as many as 500 a year.
Graduates must stay with the budget carrier for five years, AirAsia Chief Executive Officer Tony Fernandes said.
New flight schools also are opening. CAPA is investing at least $125 million to build an aerospace university in India that can train about 300 pilots a year, Somaia said.
The shortage, and hiring by a new crop of budget carriers, also could push wages higher.
“There is a misconception that low-cost airlines pay lower salaries,” said Tony Davis, chief executive officer of budget carrier Tiger Airways Holdings Ltd., part-owned by Singapore Air “We couldn’t do that in a competitive market.”
Basic pay for Singapore Air captains flying twin-aisle Boeing 777s or the Airbus A330s begin at S$9,300 ($6,870) a month, excluding allowances, said P. James, president of the Air Line Pilots Association of Singapore. They also earn a productivity allowance of as much as S$3,800 for flying 70 hours a month.
Emirates offers a starting monthly salary of 34,410 dirhams ($9,370) for captains, according to its website. That excludes benefits such as hourly flying and productivity payments.
Its other perks include a tax-free basic salary, profit sharing, villas for captains and free dry cleaning of uniforms, its website said. Those incentives help attract candidates to an increasingly demanding job, said Barry Jackson, president of the Australian and International Pilots Association, who has been a pilot at Qantas since 1987.
“Young people these days prefer to become doctors or lawyers,” he said. “This sort of career path is becoming less desirable.”