Australia’s watchdog has reauthorised Virgin and Delta’s alliance for another five years, saying it is likely to be ‘valued by travellers’.
Reauthorisation was handed down this morning and allows the two airlines to continue partnering and codesharing on flights between Sydney and Los Angeles as well as Brisbane and Los Angeles.
With approval, the two airlines would work together for a total of 11 years, with first approval received in December 2009.
Australian Competition and Consumer Commission (ACCC) Chairman, Rod Sims, said the integrated network has resulted in increased and better connections.
The ACCC also found that the alliance gave Virgin and Delta the opportunity to compete more effectively on routes between Australia and the US and contributed to their combined market share of 37 percent on key overlap route of Sydney to Los Angeles.
“Virgin and Delta operate return services between Sydney and Los Angeles, and Brisbane and Los Angeles—travellers use these key gateway points to then connect with other destinations.”
Rod Sims, ACCC Chairman
“This is reflected in the growing number of passengers using such connecting services.
“The alliance has also resulted in enhanced products and services including increased and better connections, access to each other’s flights and better schedule spread, loyalty program benefits, and improved lounge access.”
Approval of the alliance extension comes despite Hawaiian Airlines CEO Mark Dunkerley disputing that trans-Pacific alliances are actually reducing competition and increasing airfares.
Speaking at the CAPA Aviation Summit, he argued that joint ventures between US and European carriers had significantly increased prices on trans-Atlantic routes and the same could occur on the trans-Pacific.
“It is going to be bad for the consumer to a degree even more pronounced than seen in Europe due to the remote geography of the Pacific and the nature of the demographics.”
Mark Dunkerley, Hawaiian Airlines CEO