The alliance between Virgin Australia and Etihad looks set to get the green light for a further five years as the competition regulator proposed the reauthorise the deal.
The Australian Competition and Consumer Commission first granted authorisation to the alliance on February 3, 2011. Its implementation saw Virgin introduce Sydney-Abu Dhabi services, with the carriers coordinating pricing and scheduling across their networks.
The ACCC accepted that Virgin would not operate services to Abu Dhabi without the partnership in place.
“Virgin could not offer a viable service on the route without offering the beyond connections available on Etihad’s network within the alliance,” chairman Rod Sims said.
“The ACCC considers this alliance would likely result in continued public benefits through promoting competition and enhancing the products and services offered to customers travelling between Australia and the Middle East and onward destinations throughout Europe.”
Virgin chief executive John Borghetti welcomed the draft determination, saying that over the last five years the airline had worked closely with Etihad to “ensure the alliance continues to generate benefits for customers”.
“We have introduced more codeshare destinations, delivered further enhancements to the customer experience and more than doubled seat capacity between Australia and Abu Dhabi, through the launch of new routes, flight frequencies and larger aircraft.”
The ACCC is seeking submissions from interested parties by November 16 before it makes its final decision.
