An alliance between Singapore Airlines and Air New Zealand spells trouble for Qantas.
Singapore Airlines will reveal this morning that it has formed another alliance, with speculation growing that the new bedfellow will be Air New Zealand.
A tie up between Singapore Airlines and Air New Zealand - both of which are cornerstone shareholders in Virgin Australia - will step up pressure on Qantas in the Asia-Pacific, the world's fastest growing travel market.
Fresh from sealing a deal to set up a full-service airline in India, Singapore Airlines is set to reveal details of its new alliance partner in the city-state today.
Singapore Airlines is seen as a logical partner for Air New Zealand, which will take delivery of the first of 10 new Boeing 787-9 Dreamliners in the middle of this year.
The longer-range version of the Dreamliners will be deployed to destinations in Asia under Air New Zealand's so-called 'go beyond' strategy.
Chinese airlines have also been touted as potential new bedfellows for Singapore Airlines, although the latter has struggled to cement deals in China or Taiwan.
Both Air New Zealand and Singapore Airlines also have extensive code-share alliances with Virgin on routes to Singapore and beyond, and across the Tasman.
The New Zealand government reduced its stake in the Kiwi carrier to 53 per cent last month, and the airline is aggressively targeting routes in the Asia-Pacific.
An alliance between Air New Zealand and Singapore Airlines will also cement ties between a block of airlines that includes Virgin, and ramp up pressure on Qantas which faces a loss of up to $300 million in the first half.
Qantas is undertaking a strategic review, which includes the potential for a partial sell off of its prized frequent-flyer division, while it waits to hear whether the federal government will grant it a form of financial assistance.
Air New Zealand remained tight lipped last night, saying it was in regular discussions with alliance partners but did not comment on speculation.
The airline formed a strategic alliance with Cathay Pacific last year.
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