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Delta-Virgin Blue Group Pacific joint venture tentatively approved by Australian authority

2-Nov-2009 5:09 PM

The Australian Competition and Consumer Commission (ACCC) has issued (02-Nov-2009) a draft determination proposing to grant authorisation for a JV between Virgin Blue Group and Delta Air Lines on their flights between Australia and the United States (trans-Pacific routes). Under the joint venture, the airlines would take a coordinated approach to a range of issues including pricing, revenue management, schedules, capacity and routes flown. The ACCC recognises that the extent to which these benefits are realised will depend largely on the conduct of the parties under the joint venture, and has thus proposed to grant authorisation for a limited period of three years. Delta and Virgin Blue welcomed (02-Nov-2009) the decision, stating they would continue to work with the ACCC in the authorisation process. The two carriers are still awaiting approval from the US Deparment of Transportation (DOT) (The Australian, 02-Nov-2009). [more - ACCC] [more - Virgin Blue and Delta Air Lines]

Australian Competition and Consumer Commission: "The ACCC considers that the joint venture is likely to assist Virgin Blue and Delta to compete more effectively against the incumbents on the routes, Qantas and United Airlines. The entry of Virgin Blue and Delta on the trans-Pacific routes has created strong competition on price and service in the market for passenger transport. The ACCC expects that this would continue to be the case under the new arrangements to the benefit of consumers," Graeme Samuel, Chairman. Source: Australian Competition and Consumer Commission, 02-Nov-2009.