Australian regulators have given tentative approval to a partnership between and , which is the last major piece of the Australian carrier’s “virtual network” strategy.
The Australian Competition and Consumer Commission (ACCC) says the link between the two airlines “is unlikely to result in significant anti-competitive detriment in any of the relevant markets.” The ACCC notes that the pair compete on a limited number of routes, and in each case there are other competitors “that are in a position to constrain the alliance’s price and service decisions.” The regulator also says the arrangement will make Virgin Australia more competitive with.
Virgin Australia and Singapore announced their intention to join forces in June. The proposed deal includes code-sharing and cooperation on prices and schedules, but does not cover revenue sharing. The partnership gives Singapore access to the Australian and New Zealand markets, while Virgin Australia gains access to the Singapore hub and important Asian markets such as China and India. Virgin Australia currently does not fly its own aircraft to Singapore.
The ACCC will seek submissions before issuing a final approval. The deal must also be approved by the Competition Commission of Singapore. The airlines said in June that they expect to have final approval from both regulators by the beginning of 2012.
Virgin Australia has also formed links with, and , giving it the ability to offer an international network while operating few international flights on its own aircraft.