Virgin Australia has just been granted “interim authorisation” by the ACCC to deepen their partnership with Virgin Atlantic on flights between Australia and the United Kingdom/Ireland, via Hong Kong, Los Angeles and any other future mutual connecting points.
While the two airlines are separate businesses, they already have a codeshare arrangement which allows them to market flights on planes flown by the other.
Once this new authorisation goes live it will allow the two airlines to coordinate a whole host of things from jointly managing price and inventory to marketing strategies.
These activities are not currently allowed in their existing “arm’s length commercial codeshare and loyalty arrangements”.
ACCC Commissioner Sarah Court said the ACCC has decided that they do not believe the enhanced cooperation between the two Virgins was “likely to lessen competition on the routes between Australia and the British Isles”.
Interim authorisation will remain in effect while the ACCC considers the application for authorisation in more detail, with a draft determination, which will be open for public comment, expected by September.
A final determination is tentatively scheduled for November.
Virgin Australia told the ACCC that the Virgin Atlantic partnership would help improve the sustainability of its Australia-Hong Kong flights.
Virgin Australia noted that rivals Qantas and Cathay Pacific have larger shares and higher load factors in the market.
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