Should it be approved, the SIA deal would cap a very successful first 12 months for Virgin CEO, John Borghetti, who has cut back loss-making routes, rebranded the airline and established a high-potential network of bilateral partnerships. The benefits of Virgin's coverage of the compass should flow within the next 12 months.

Mr Borghetti calls the partnership with SIA "a huge step for us" and "a game changer" because "it really completes our alliance strategy we started 12 months ago". He says the partnership is in particular key to achieving Virgin Australia's goal of securing a 20% share of the Australian corporate market.

Under the agreement, the two airlines propose to:

• Codeshare on each other’s international and domestic flights;
• Offer reciprocal frequent flyer programme benefits and lounge access;
• Coordinate schedules between Singapore and Australia and beyond to provide seamless connections; and
• Engage in joint sales, marketing and distribution activities.

SIA and Virgin Australia will start interlining in Aug-2011. Codesharing, frequent flier links, schedule coordination and joint pricing will follow once approval for the partnership is secured, expected by the end of 2011. Both carriers do not expect any major problems in securing the required approvals.