A great result. It had generally been thought that Virgin would...

A great result. It had generally been thought that Virgin would tie with a Malaysian, Korean or Japanese airline and that an alliance with Singapore airlines would be the dream result but that it was out of their league. This is a very big tick of approval from one of the industry heavyweights. Typical of JB to go and prove the pundits wrong again!

Today's paper articles have described the benefits fairly well (ie corporate appeal, lounge access, shared marketing, domestic flow-through, potential star alliance membership ect). I also don't think this deal will exclude Virgin from potentially signing other alliances in Asia (such as with a Chinese or Indian carrier, particularly if that airline was also already Star Alliance).

This alliance also gives the Velocity Rewards program a big boost and would change the dynamics in any possible negotiations with the FlyBuys program. Essentially, Virgin can now offer Coles and all the other FlyBuys participants the chance to earn points that could be used on Virgin, Delta, AirNZ and Singapore airlines for global travel in economy or business class.

It probably shouldn't be underestimated how many corporates do all their business travel and expenses through one rewards program so that they can use the frequent flyer points to take their family on holiday. This alliance brings Velocity on per with QFF IMO.

If Virgin can achieve this Singapore alliance, then anything is possible for the Velocity program. Qantas just signed Optus, so perhaps Virgin could target Telstra? Exciting times!

Lastly, with nearly 30m shares traded today, this has been a great liquidity event to allow large holders that want to exit a chance to move on. With nearly 50% of the airline now owned by Virgin Group or AirNZ it wont take much for the remainder of available shares to become very tightly held.

All IMO.