On 13 October 2011, the ACCC issued a draft decision proposing to grant authorisation for Virgin Australia and Singapore Airlines to enter into an integrated network aviation alliance. The alliance provides for cooperation on the Australia-Singapore route as well as connecting international and domestic connecting routes, and would permit joint pricing and scheduling and joint marketing and sales.
ACCC Chairman Rod Sims stated that the alliance was “likely to make Virgin Australia more competitive with other airlines, including Qantas”. Interested parties have the opportunity to make further submissions before the ACCC makes its final decision.
Further to our note earlier this year, Qantas itself has recently received authorisation for its joint business agreement with American Airlines, under which the parties will co-ordinate services along trans-Pacific routes. In its September 2011 decision, the ACCC stated that it did not consider the JBA will have any anti-competitive effects because the parties do not currently provide any overlapping direct services on trans-Pacific routes.
In addition, Virgin’s alliance with Etihad was authorised in February. The airlines did not operate on any of the same routes.