Virgin Australia authorised to cooperate with Virgin Atlantic

8 November 2019

The ACCC has issued a determination authorising Virgin Australia (ASX: VAH) to more closely cooperate with Virgin Atlantic on flights between Australia and the UK and Ireland; via Hong Kong, Los Angeles and any other future connecting points.

Virgin Australia and Virgin Atlantic are separate businesses whose services do not currently overlap on any route, and are unlikely to do so in the future.

The businesses already have a codeshare arrangement, which allows each to market flights on planes flown by the other.

“The arrangements which have been authorised will not lessen competition on any route, and are likely to provide public benefits, including through improved scheduling and enhanced loyalty program benefits,” ACCC Commissioner Stephen Ridgeway said.

Virgin Australia considers that the cooperation will increase its passenger numbers, making its Hong Kong service more sustainable.

Authorisation will allow the two airlines to coordinate on a wide range of matters, such as jointly managing prices, inventory, and marketing strategies. These are not currently permitted in their existing arm’s length commercial codeshare and loyalty arrangements.

The ACCC has authorised the conduct until 30 November 2024.

The ACCC’s determination is available at Virgin Australia & Virgin Atlantic.

Background

Virgin Australia and Virgin Atlantic have previously been engaged in a codeshare partnership which allowed increased loyalty rewards for customers of both airlines through reciprocal frequent flyer programs and lounge access.

Authorisation provides statutory protection from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act 2010. Broadly, the ACCC may grant an authorisation when it is satisfied that the public benefit from the conduct outweighs any public detriment.

Release number: 
209/19
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