FIVE-YEAR EXTENSION FOR VIRGIN AUSTRALIA AND SINGAPORE AIRLINES ALLIANCE

FIVE-YEAR EXTENSION FOR VIRGIN AUSTRALIA AND SINGAPORE AIRLINES ALLIANCE
THE Virgin Australia (ASX: VAH) and Singapore Airlines alliance has been granted a five-year extension by the Australian Competition and Consumer Commission (ACCC).

The airlines applied for a 10-year extension in May this year, as the existing approval expired in December 2016 after being first granted in January 2012.

In its determination, the ACCC says that due to the rapidly evolving nature of the industry, it is appropriate to review the authorisation earlier than the requested 10 years.

It noted there was limited overlap between the two airlines on international routes - the Australia-Denpasar route is the only one where the two airlines have competing services.

However, Virgin flies direct to Bali, while Singapore Airlines has an indirect service to the same location, stopping in Singapore. Additionally, where both airlines provide indirect routes to international locations, there are rivals operating similar services.

Virgin Australia Group CEO, John Borghetti (pictured), says, "We welcome the ACCC's assessment that the alliance has and will continue to result in material public benefits through enhanced products and services and the promotion of competition in international air travel."

Since the alliance began in 2012, the two companies have introduced new services between Singapore, Cairns, Canberra and Darwin; have increased the frequency of routes between Australia and Singapore by 30 per cent and made a 12 per cent increase in capacity; and have added destinations in Asia, Europe and South Africa.

Virgin is trading down 1.25 per cent this morning, at $0.237 per share. Since the end of 2015, the company has dropped in value by more than 50 per cent.

Virgin Australia is 84 per cent owned by a consortium of six companies: Etihad Airways, Nanshan Group, Singapore Airlines, HNA Group, Virgin Group and Air New Zealand.


Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

Business success comes from thinking inside the box for TAXIBOX founder
Partner Content
On a first glance, the world of storage solutions might not seem particularly exciting ...
TAXIBOX
Advertisement

Related Stories

Will philosophy and ‘counterfactuals’ help us unlock the mysteries of AI?

Will philosophy and ‘counterfactuals’ help us unlock the mysteries of AI?

Artificial intelligence is increasingly being rolled out all around...

ACCC launches probe into misleading social media influencer posts

ACCC launches probe into misleading social media influencer posts

Australia's consumer watchdog is cracking down on social media ...

Takeover talks reignited between Tyro and Potentia Capital

Takeover talks reignited between Tyro and Potentia Capital

Talks of a potential takeover are back on between Sydney-based Tyro...

Go1 acquires AI-powered ed-tech Anders Pink

Go1 acquires AI-powered ed-tech Anders Pink

Queensland-based Go1 has this week acquired a UK ed-tech partner fo...