Draft determination would renew SQ/VA pact for a further five years.
The Australian Competition and Consumer Commission has just published its draft decision on the alliance between Virgin Australia and Singapore Airlines, saying it proposes to renew the authorisation for five years, rather than the ten requested by the carriers.
According to the ruling, the ACCC considers the alliance has resulted in “material public benefits,” in the form of enhanced products and services, new routes and additional frequencies, better connection options, greater loyalty program benefits and improved lounge access.
“By leveraging their integrated alliance network, which is greater than either airline could have offered alone, the Applicants are likely to attract passengers who otherwise may not have flown with either Virgin Australia or Singapore Airlines…this is likely to trigger a competitive response from competing airlines,” the Commission said.
Other benefits include operational efficiencies which could be passed through to consumers in the form of lower fares or better services, as well as the potential stimulation of tourism.
Virgin Australia welcomed the decision, with VA GM Alliances Phil Squires saying since the alliance with Singapore Airlines launched in 2012 the airlines had worked closely together “to offer choice and competition for Australians”.
The ACCC is now seeking further submissions in relation to the draft determination before making its final decision.
More detail in tomorrow’s issue of Travel Daily.