ACCC proposes to authorise alliance between Virgin Australia and Singapore Airlines
13-Oct-2011 The ACCC has issued a draft decision proposing to grant authorisation for Virgin Australia and Singapore Airlines to enter into an integrated network aviation alliance.Under the alliance, the airlines will cooperate on all aspects of their Australia - Singapore services and any international and domestic connecting routes, including joint pricing and scheduling and joint marketing and sales.
"The ACCC considers that this alliance is likely to result in material benefits to the public including enhanced products and services, in particular increased online connectivity for passengers," ACCC chairman Rod Sims said.
"The ACCC also considers that the alliance is likely to make Virgin Australia more competitive with other airlines, including Qantas."
The parties compete on a limited number of routes and upon each of these routes there are a number of competitors offering services that are in a position to constrain the alliance's price and service decisions. Therefore, the ACCC view is that the alliance is unlikely to result in significant anti-competitive detriment in any of the relevant markets.
Authorisation provides immunity from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act 2010. 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 that a conference be held to make oral submissions on the draft determination.