ACCC issues draft decision to authorise Virgin Blue-Etihad alliance

The Australian Competition and Consumer Commission has issued a draft determination proposing to grant authorisation for an alliance between Virgin Blue and Etihad (the Alliance).

Under the Alliance, Virgin Blue and Etihad have agreed to cooperate on joint pricing and scheduling of services across their networks. The Alliance will also add capacity between Australia and Abu Dhabi.

"The ACCC considers that the Alliance is likely to promote competition and result in benefits for Australian consumers through new international services and increased online connections," ACCC chairman Graeme Samuel said.

The ACCC is of the view that the Alliance is unlikely to result in any public detriment given that Virgin Blue and Etihad currently do not directly compete on any routes.

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 will now seek further submissions from the applicants and interested parties in relation to this draft determination prior to making a final decision. The applicants or interested parties may also request a conference be held to make oral submissions on the draft determination.

The ACCC's determination will be available from the ACCC website.