VIRGIN BLUE LOOKS TO GROW ACROSS ASIA THROUGH ALLIANCES AS ACCC SAYS YES TO ETIHAD DEAL

Dino D'Amore
By Dino D'Amore February 3, 2011 12:24

VIRGIN BLUE LOOKS TO GROW ACROSS ASIA THROUGH ALLIANCES AS ACCC SAYS YES TO ETIHAD DEAL

The alliance between Virgin Blue and Etihad has received the blessing of the ACCC (Australian Competition and Consumer Commission).‘‘The ACCC considers that the alliance is likely to promote competition and result in new international services, in particular between Australia and Abu Dhabi with onward connections to Europe,’’ said ACCC chairman Graeme Samuel.

The five-year alliance will run through to 2016, and Virgin Blue’s international carrier V Australia will begin direct Sydney-Abu Dhabi services on February 24th significantly boosting the reach of the V Australia brand as a competitor to Qantas.

Virgin Blue and Etihad will cooperate on joint ticket pricing and flight scheduling across their networks – activity that would be considered illegal without approval by the regulator.

Virgin Blue CEO John Borghetti welcomed the approval, describing the Etihad tie-up as “a key part of our strategy of building an international network with global coverage that compliments our core domestic business.” Borghetti, who has previously spoken of his desire for Virgin Blue to be a “virtual airline” based on strategic partnerships feeding into a ‘spoke-and-hub’ model’, also hopes to form an alliance with US carrier Delta to open up the lucrative North American market. Although the US Department of Transportation previously rejected the tie up in September 2010, both airlines have promised not to reduce flights between Australia and America if approval was given. The deal has already been approved by the ACCC.

Virgin Blue now seeks an Asian airline partner admitting that Virgin Blue’s network needs “mainstream Asian ports to attract the corporate traveller”.

A similar alliance with Air New Zealand will commence in the later half of this year, providing Virgin Blue customers with trans-Tasman access to ANZ’s long-haul network via its Auckland hub as well as the provision of additional direct services between Australian and New Zealand cities just in time for the Rugby world cup.

Dino D'Amore
By Dino D'Amore February 3, 2011 12:24
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