ACCC approves Virgin Delta deal

[777]

Virgin Blue has gained a much needed fillip after the competition watchdog today signalled approval for its planned tie-up with Delta Air Lines on flights between Australia and the US.

The Australian Competition and Consumer Commission said today that the proposed joint venture was likely to assist Virgin and Delta to compete more effectively against the incumbent airlines on the route, Qantas and United Airlines.

From: ACCC gives nod of approval to Virgin tie-up with Delta


Still waiting on US approval though.

 

[sampson]

Tommorrow's headline might read "Qantas crashes gravy train"

 

[ejb_nz]

This can only lead to higher airfares as competition is reduced.

I think this is another case of the ACCC rolling over for business and screwing the people it is meant to help.

How can reducing the number of competitors by 25% be good for consumers and that is their "mission statement". Surely the world's largest airline (Delta) does not need help in competing against UA.

YMMV

/end rant

ejb

 

[dajop]

How can reducing the number of competitors by 25% be good for consumers and that is their "mission statement". Surely the world's largest airline (Delta) does not need help in competing against UA.

I disagree, if you look at the likely scenario, VA is the most likely to struggle with the route, so their services are likely to be unsustainable, so left with three direct competitors anyway. It is clear that DL and VA individually cannot sustain 4xdaily services direct from AUS->USA like QF does. VA's weakness in competing with QF is lack of ability to get traffic into other US ports (which QF and AA do so effectively). DL's weakness is lack of connection traffic in AUS - and DJ solves that problem. Therefore I think co-ordinated DL/VA scheduling coupled with FF linkages and extensive codesharing provides more competition to QF than a couple of weaker competitors would. A level of competition that has been absent since AN collapsed when you had extensive co-operation between AN, UA and NZ (not forgetting NZ's direct SYD-LAX service before AN collapsed).

 

[sampson]

my sentiments exactly: the US and Oz regulators are giving exeptions from anti collusions laws so higher fares are inevitable. At least ther will be viable sustainable companies staying in business imo.

 

[Warks]

Regarding VA's lack of ability to get traffic into other US airports: wasn't there going to be a tie-in with Virgin America? While not extensive they have some good routes and will hopefully grow. Flew with them last month and I'd recommend them to anyone who knows what domestic US airlines can be like. Best I've flown in the US (in Y anyway).

 

[harvyk]

I still find it weird that virgin doesn't want to stay all in house

eg tie Virgin Blue with VAustralia, Virgin Atlantic and Virgin America all together. Given they are all using the same "brand" even if they are not the same company it just send strange messages to the end consumer... Besides, they could offer a truely "global" service if they tried something which would rival the airline alliances...