Aviation

ACCC gives Virgin Australia’s cooperation plans with Virgin Atlantic a boost

Virgin Australia’s wish to attract more passengers through closer ties with Virgin Atlantic looks set to become a reality.

The ACCC has issued a draft determination proposing to authorise Virgin Australia to more closely cooperate with Virgin Atlantic on flights between Australia and the UK and Ireland, via Hong Kong, Los Angeles and any other future mutual connecting points.

ACCC commissioner Stephen Ridgeway said: “Virgin Australia and Virgin Atlantic have asked to be authorised to cooperate more closely to improve their services between Australia and the UK and Ireland and attract more passengers.

“In authorising this cooperation, we expect to see improvements to the carriers’ schedules and services to passengers.”

Virgin Australia is hoping the closer cooperation with Virgin Atlantic will increase passenger numbers and enable the airline to operate its Hong Kong service in a more sustainable fashion.

Virgin Australia and Virgin Atlantic are separate businesses that do not operate overlapping services on any routes, and the ACCC noted in its draft determination that this is unlikely to change in the future.

The airlines already have a codeshare arrangement which allows each to market flights on planes flown by the other.

Authorisation of closer cooperation will allow the two airlines to coordinate on a wide range of matters, such as jointly managing prices, inventory, and marketing strategies, which are not currently permitted in their existing arm’s length commercial codeshare and loyalty arrangements.

The ACCC granted Virgin Australia and Virgin Atlantic interim authorisation on 4 July 2019, which will remain in effect until a final authorisation decision is announced.

The ACCC’s draft determination is welcome news for Virgin Australia, having only recently posted its seventh straight full-year loss and flagged 750 job cuts.

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