More Threats to Qantas Profitability With Virgin-Singapore Airlines Tie-up Underway

The financial stability of embattled airline Qantas is facing another threat over the tie-up between Virgin Australia and Singapore Airlines.

Virgin Australia and Singapore Airlines are discussing more strategic alliances which could result in more flights to Australia that would, in turn, eat into Qantas's dwindling market share, particularly in international operations.

Besides the two air carriers, Qantas also faces intense competition from Middle Easter airlines such as Qatar Airways, Emirates and Etihad, which also has a partnership with Virgin Australia. As a result, the Australian flag carrier has anticipated over $450 million in losses for its international operations for the current financial year.

Singapore Airlines will add 10 more flights weekly to Australia from its current 102 to 112 by the end of 2012. The 10 additional trips would be on top of the air carrier's present flights to Sydney and Melbourne and SilkAir's trips to Darwin which started in March.

Subhas Menon, regional vice president of Singapore Airlines, disclosed that the air carrier would begin to fly to Perth and Brisbane and add three more flights to Adelaide weekly from seven to 10 beginning July 2. The additional Adelaide trips leave 5 p.m. every Monday, Tuesday and Saturday, which were actually an old route that the company stopped in January but will restore next week.

While Qantas is struggling to convince more Australians and other nationalities to ride the flag carrier when traveling overseas, Singapore Airlines considers Australia and China as growth markers due to their strong economies and high demand for business travel service.

Qantas, in a bid to boost its ridership, tapped social media in its newly launched advertising campaign that will have customers' names painted on the air carrier's fleet of A380 Airbuses and Boeing 737s. Besides having their names emblazoned on Qantas jets, Aussies may also appear in a new ad by walking past a Qantas digital sign with the phones running a Qantas ad. The digital sign is located at the Town Hall station of the air carrier in Sydney.

Other changes to Qantas advertising strategies include sidelining the its decade-old advertising line "I still call Australia home" to the new slogan "The spirit of Australians which comes with the tagline "You're the reason we fly."

The old line, introduced over 10 years ago at the Sydney Olympic games, would still be used by Qantas for special event advertising only.