Virgin-Delta alliance approved for 5 years

The competition watchdog has given the go ahead for Virgin Australia to continue its trans-Pacific alliance with US-based Delta Air Lines for another five years.

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The Australian Competition and Consumer Commission has given the all-clear for the airlines to continue to operate a single integrated network between the US and Australia and within their respective domestic markets.

Virgin and Delta sought approval to extend the partnership, which was first authorised in 2009, for another decade, but the ACCC opted to restrict the approval period to five years to allow it to assess future changes in the global aviation industry.

ACCC chairman Rod Sims said the partnership had benefited passengers by allowing them to fly between Brisbane and Sydney in Australia and Los Angeles in the US and to use the respective ports as gateways for connecting services.

He said the arrangement had also resulted in better products and services for customers.

“The ACCC accepts this integrated network will likely be valued by travellers between Australia and the US,” he said.

The Virgin/Delta partnership has a combined market share of 37 per cent on the Sydney to LA route, which is dominated by Qantas and its partner, American Airlines.

Virgin boss John Borghetti welcomed the ACCC decision.

“Since the launch of the alliance in 2009, Virgin Australia and Delta Air Lines have delivered choice and competition across the Pacific,” he said.

“We welcome the ACCC’s assessment of the public benefit the alliance brings to both Australian and American travellers.”

Virgin shares were up one cent to 44.4 cents as of 1100 AEST.