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Australian Government defends Virgin Blue/Delta JV

18-Oct-2010 11:13 AM

Australia's Department of Infrastructure and Transport Deputy Secretary Andrew Wilson stated in a submission to the US Department of Transportation (DoT) regarding Virgin Blue and Delta Air Lines’ proposed antitrust immunity that the Australian Government had expected the country’s airlines would be able to seek antitrust immunity when Australia and the US negotiated their 2008 Open Skies agreement (The Australian, 16-Oct-2010). Mr Wilson stated V Australia and Delta operate without support from the Star Alliance or oneworld and approval of their proposed JV would allow them to better compete, “facilitating long-term sustainable competition by three more equally balanced groupings of airlines”. He also noted that the Australian Competition and Consumer Commission (ACCC) has determined the JV would benefit the public and is unlikely to result in reduced competition. Delta and Virgin have argued the JV would lower fares, improve service quality and boost passenger numbers for the airlines. They have also promised to expand services and provided a two year commitment that they will not reduce trans-Pacific frequencies.

Australian Department of Infrastructure and Transport: “Our understanding of the history of anti-trust approvals between the US and foreign carriers under open skies agreements suggests it is extremely rare for such approvals not to be granted, particularly in cases where the proposed arrangement is between two airlines who have a similar share of the market (such as V Australia and Delta). In particular, the ACCC noted the joint venture is likely to give rise to route connectivity benefits for consumers, enhanced route coverage and schedules, and more sustainable competition,” Andrew Wilson, Deputy Secretary. Source: The Australian, 16-Oct-2010.