Regulator allows Virgins to hop into bed together

September 13, 2019
Virgins and Velocity

Australia’s competition regulator is proposing to authorize for five years a request by Virgins Australia and Atlantic to work more closely together.

The proposal had already received interim authorization in July but the Australian Competition and  Consumer Commission said Friday it planned to give it full green light.

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The airlines want to cooperate on services between Australia and the UK/Ireland via mutual mid-points in Hong Kong, Los Angeles and “other future mutual connection points”.

The Virgins had argued this would increase passenger numbers on its Hong Kong service and allow it to operate more sustainably against dominant players Cathay Pacific and Qantas.

Although they share a common brand, the ACCC determined the carriers were separate businesses that do not operate overlapping services on any routes and were unlikely to do so in the future.

It said it considered it was unlikely the proposal would result in any significant detriment to competition on existing or future routes between Australia and the UK/Ireland.

“In authorizing this cooperation, we expect to see improvements to the carriers’ schedules and services to passengers,” ACCC commissioner Stephen Ridgeway said.

The ACCC said the authorization would allow the two airlines to coordinate on a wide range of matters, such as jointly managing prices, inventory, and marketing strategies.

This was not currently permitted in their existing arm’s length commercial codeshare and loyalty arrangements, it said.

There were no objections to the proposal, which attracted submissions from Tourism Australia, Qantas and Air Mauritius.