Virgin Blue looks likely to be given approval by the Australian Competition and Consumer Commission on a code sharing agreement with Middle East airline Etihad, with draft approval given by ACCC the same day the competition regulator approved Virgin Blue’s alliance with Air New Zealand.
Virgin Blue and Etihad have agreed to cooperate on joint pricing and scheduling of services across their networks, this will open up each airlines’ networks to Australian and Middle Eastern flyers with coordinated scheduling and connecting flights between the two destinations. The Virgin Blue -Etihad Alliance will also add capacity between Australia and Abu Dhabi.
ACCC chairman Graeme Samuel believes the alliance will be good for competition, with Virgin Blue only able to operate to the destination by participating in the Alliance.
“The ACCC considers that the Alliance is likely to promote competition and result in benefits for Australian consumers through new international services and increased online connections,”
The ACCC is of the view that the Alliance is unlikely to result in any public detriment given that Virgin Blue and Etihad currently do not directly compete on any routes.
James Hogan, Etihad Airways’ Chief Executive Officer, said the airline is delighted with the ACCC’s decision.
“We are delighted by the draft determination, and are confident that this alliance will promote competition and generate benefits for travellers.
“Partnering with Virgin Blue enables Etihad to offer customers 45 new destinations across Australia, New Zealand and the Pacific Islands, and opens a host of new connections and routings to Australian travellers via Abu Dhabi.
“With our frequent flyer programs working together, Etihad and Virgin Blue offer a compelling travel option for corporate travel accounts worldwide, and we look forward to focusing on this important segment.”
Virgin Blue’s rival QANTAS has previously objected to the Virgin Blue – Etihad Alliance in submissions made to the ACCC, however seems likely to counter Virgin Blue’s Etihad alliance with low cost airline Jetstar in deals with airlines in China.