The Aussie consumer watchdog has flagged concerns over Virgin Australia’s proposed regional Charter Alliance, saying it would reduce competition in Western Australia.
In a proposal to block Virgin Australia’s alliance with Virgin Australia Regional Airlines and Alliance Aviation Services, the Australian Competition and Consumer Commission (ACCC) claimed that the arrangement would reduce the number of fly-in-fly-out providers in Western Australia from four to three as well as eliminate competition to just two suppliers.
ACCC Commissioner, Sarah Court, said public benefits of the alliance would be outweighed by “significant public detriment”, particularly reduced competition.
“Therefore, the ACCC’s preliminary view is that this alliance is likely to materially reduce competition for the supply of FIFO services in Western Australia.”
Sarah Court, ACCC Commissioner
Under the proposed Charter Alliance, Virgin Australia Regional Airlines and Alliance Airlines propose to jointly bid for and contract with corporate charter customers in relation to the provision of fly-in-fly-out (FIFO) air services. They also propose to cooperate in relation to various aspects of their FIFO operations including aircraft maintenance, airport handling, check-in, frequent flyer programs, lounge access, scheduling, pricing, and sales and marketing.
The ACCC is seeking submissions by 27 January on the draft determination, particularly from FIFO customers.
