Singapore Airlines and Virgin Australia will be able to continue their alliance for another five years under a draft determination by Australia’s consumer watchdog.
The Australian Competition and Consumer Commission found that the airlines’ agreement to co-ordinate their operations and codeshare on each other’s passenger networks had resulted in material public benefits and was likely to continue to do so.
These included enhanced product and services, including new routes and additional frequencies, as well as better online connections, improved lounge access and greater loyalty program benefits.
The alliance also promoted competition in international markets, stimulated tourism and delivered small public benefits in terms of operational efficiencies that may be passed on to consumers as lower fares.
“The ACCC considers that the Alliance has resulted, and is likely to result, in little public detriment,’’ the ACCC said.
The airlines sought reauthorisation for 10 years but the competition body stuck to its position that the ongoing evolution of markets between Australia, and Europe and Australia and Asia meant a five-year term was more appropriate.
It is now seeking submissions ahead of a final determination.
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