ACCC grants interim approval for Virgin Australia, Hong Kong Airlines and HNA Group alliance

Australian Competition and Consumer Commission (ACCC) granted (20-Mar-2017) interim authorisation to the alliance framework agreement application made by Virgin Australia, HNA Group, Hong Kong Airlines and Hong Kong Express Airways. The parties sought:

• Reciprocal codeshare agreements between Virgin Australia, Hong Kong Airlines and HNA Group (including Hainan Airlines, Beijing Capital Airlines and Tianjin Airlines);
• Special prorate agreements between the primary alliance partners;
• Reciprocal frequent flyer participation and lounge access agreement between Velocity Frequent Flyer and Fortune Wings Club;
• Joint route planning and economic risk sharing agreements for operations to/from Hong Kong and China between the primary alliance partners;
• Flight interruption manifest agreements;
• A reciprocal staff and duty travel agreement;
• Any other agreements required to give effect to the alliance framework agreement.

In granting interim authorisation, the ACCC considers that:

• The agreement appears likely to result in some public benefit and limited public detriment;
• There is benefit in granting interim authorisation as allowing the applicants to enter the agreement will:
• • Facilitate earlier launch of new Australia-Hong Kong services by Virgin Australia;
  • Support existing services between Australia and mainland China and Australia and Hong Kong, as well as domestic services operated by the applicants, by allowing marketing/selling services other alliance partners sooner than would otherwise be the case.

The applicants required interim authorisation to:

• Ensure Virgin Australia is able to launch proposed new services in 2017;
• Allow Virgin Australia to support existing and planned services operated by Hong Kong Airlines and HNA Group. [more - original PR]