So the much vaulted (8 years ago) deal between these high branded fellows looks like it will finally end with a nice profit for SQ and VS firmly back in the hands of Sir Richard the Lion Heart.
Did it fail? Yes it did not live up to its aspirations. There were 3 primary reasons that SQ took the stake.
1. An insurance policy for its alliance. At the time you will recall that United and Air Canada were hardly in the best of shape and clearly didnt have a good feed for SQ. They still dont BTW.
2. A great investment. This has been proven and so those canny chaps in SQ made that a good point.
3. Access to LHR. This issue is no longer as important as it once was.
Was it a good deal? Yes great deal all round except the synergies didnt happen and most of the expectations were not realized. There have been very few passenger benefits and VS has (probably) wisely steered clear of the Alliance game to date. Dont forget that SQ harbors significant aspirations across the Pacific with its sights set on Oz to US West Coast. These have been dashed by the likes of local hero Virgin Blue who will be flying transpac next year if they have any say in the matter.
What will happen next?
Branson likes partners. I suspect he will be on the look out for another player. However with Virgin Blue now going Transpac and Virgin America coming to an airport near you in the USA - there really is no need for a partner.
Dont look for any near term change.
Cheers
Timothy
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