The Australian Competition and Consumer Commission has issued a draft determination proposing to grant authorisation for a joint venture between Virgin Blue and Delta Air Lines on their flights between Australia and the United States (the 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.
Authorisation provides immunity from court action for conduct that might otherwise raise concerns under the competition provisions of the Trade Practices Act 1974. Broadly, the ACCC may grant an authorisation when it is satisfied that the public benefit from the conduct outweighs any public detriment.
"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," ACCC Chairman, Mr Graeme Samuel, said.
"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," Mr Samuel said.
However, 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. In light of this, the ACCC proposes to grant authorisation for a limited period of three years.
The ACCC's draft determination will be available from the ACCC website. The ACCC is seeking submissions from interested parties by November 17.