The Australian Competition and Consumer Commission (ACCC) granted provisional clearance to the proposed codeshare agreement between Virgin Australia and United Airlines.
This approval follows the clearance granted in March 2022 by the U.S. Department of Transport (DoT) of the agreement between the two companies.
The surprise codeshare agreement, proposed in December, between Virgin Australia and United Airlines dissolved the joint venture between the Australian carrier and Delta Air Lines.
The new agreement will allow one carrier to place its code on passenger flight services operated by the other, extending each other’s networks to both sides of the Pacific. Customers of both carriers will be able to get more benefits for MileagePlus and Velocity Frequent Flyer members.
The tentative agreement
According to the ACCC, the interim authorization allows United Airlines to set the fares at which Virgin Australia can sell United-operated services, whether those services are sold as a stand-alone itinerary or as part of an itinerary that includes Australian-operated flight segments.
«The ACCC’s preliminary view is that this proposed codeshare agreement with United Airlines is likely to result in a public benefit as it will assist Virgin Australia in re-establishing its international network,» said Stephen Ridgeway, commissioner of the ACCC.
Virgin Australia eliminated all its long-haul flights when it retired its Airbus A330-200 and Boeing 777-300ERs to mitigate the financial losses it had been incurring because of the health crisis generated by COVID-19.
«At present, it seems unlikely that Virgin Australia will be able to operate its own long-haul international services in the short term,» Ridgeway added.
The company stopped operating in the United States during the pandemic, the company’s main intercontinental market. Qantas, along with its low-cost Jetstar, are now the only Australian operators to the Americas.
«These arrangements are unlikely to reduce competition as there is no operational overlap on any route between Virgin Australia and United Airlines and there are other airlines operating on the routes,» the ACCC commissioner concluded.
The agreement between Virgin Australia and United
Virgin Australia currently operates domestic and short-haul international services on Airbus A320, Boeing 737-700, Boeing 737-800, and Fokker 100 aircraft. The agreement will give it access to 92 U.S. destinations through United.
United Airlines currently operates in Australia with twice daily flights to Sydney (SYD) from San Francisco (SFO) and Los Angeles (LAX) on Boeing 777-300ER aircraft.
Beginning June 2, it will resume operations to Melbourne (MEL) from San Francisco with three weekly flights, increasing to one daily flight in November. Then, on October 28, a connection to Los Angeles will be added with daily service.
The year will end with the inauguration of daily non-stop service between Houston (IAH), United Airlines’ main base, and Sydney (SYD) from October 28.
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