Officials at the Australian Competition and Consumer Commission (ACCC) have provisionally approved a codeshare agreement between Singapore Airlines and Virgin Australia.
Under the proposed 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 explained.
“The ACCC also considers that the alliance is likely to make Virgin Australia more competitive with other airlines, including Qantas.”
The two airlines compete on a limited number of routes and upon each of these routes there are a number of competitors offering services which are in a position to constrain the alliance’s price and service decisions, the ACCC felt.
Therefore, the ACCC argued 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.