28-Oct-2020 10:20 AM
ACCC: Virgin Australia & Alliance Airlines seek to cooperate on 40 domestic & 2 international routes
Australian Competition and Consumer Commission (ACCC) reported (23-Oct-2020) Virgin Australia and Alliance Airlines applied for authorisation to cooperate in relation to the provision of services on around 40 regional routes and two short haul international routes (Brisbane-Port Moresby and Brisbane-Honiara) for a period of a minimum of two years. The applicants are seeking authorisation in order to efficiently manage capacity and quickly respond to changes in demand due to the COVID-19 pandemic, including by:
- Sharing information, including in relation to costs, willingness to operate, capacity, utilisation, anticipated demand and pricing about the routes;
- Agreeing capacity, flight schedules, and aircraft type, including whether a carrier will suspend or continue operations, which carrier will operate the routes and under what commercial arrangements (e.g. wet lease or codeshare, or a revenue-sharing model);
- Putting in place temporary commercial arrangements that are most suitable for the route, considering demand and risk profile in the exceptional current market conditions;
- Potentially, entering risk and revenue sharing mechanisms and agreements as to price.
The ACCC invites submissions on the interim authorisation request by 10-Nov-2020 and on the substantive application for authorisation by 20-Nov-2020. A final determination will be made in Mar-2021. [more - original PR]