ACCC clears Virgin and Alliance to cooperate on regional air routes

Virgin Australia and Alliance Airlines have received authorisation from the Australian Competition and Consumer Commission to work together on 41 regional routes.

The cooperative arrangement will allow the two operators to share information, and to agree on service capacity, schedules and potentially revenue sharing on the routes on which they operate, including for new routes not currently serviced by either airline.

ACCC
Commissioner Stephen Ridgeway said the interim authorisation will help
facilitate a more competitive aviation landscape as Australian consumers resume
travelling and demand for flights increases.

“Cooperating
to provide services on these regional routes will assist both airlines to
efficiently manage capacity and quickly respond to increases in demand as
travel restrictions ease,” Mr Ridgeway said.

“A delay in Virgin Australia fully reestablishing its network, while other airlines are increasing services in response to greater demand as travel restrictions ease, is likely to result in less competitive markets.

“This is
why we have given this arrangement interim authorisation while we consider the substantive
application,” Mr Ridgeway said.

Under the
terms of the authorisation, Virgin and Alliance will not compete on the routes
covered by the agreement.

“Our
preliminary view is that any public detriment resulting from reduced competition
between Alliance Airlines and Virgin Australia is likely to be limited, given
Alliance Airlines’ limited number of scheduled regular passenger services,” he
said.

Having granted interim authorisation, the ACCC is seeking feedback from interested parties on the substantive application for authorisation. Go to the ACCC webpage from more information on how to make a submission.