| Australia's competition regulator has given the go-ahead for an alliance between Virgin Australia and Singapore Airlines saying the tie-up is likely to increase competition for international air passengers, reported Dow Jones Newswires. |
The deal, which will intensify pressure on rival Qantas Airways, which is also seeking to expand its presence in Asia, had already been given preliminary approval by the Australian Competition and Consumer Commission in October.
The ACCC said the alliance, which will see the airlines cooperate on joint pricing, scheduling, marketing, and sales for flights between Australia and Singapore and on connecting domestic and international routes, would "be attractive to both corporate and government passengers".
"The ACCC considers that the alliance is likely to lead to increased competition for international air passenger services," ACCC chairman Rod Sims said.
Virgin is pushing to raise its appeal to higher-margin business customers and strike agreements with other airlines. Starting last month, it has run code-shares on flights between Australia and the US with Delta Air Lines.
Virgin predicted that its alliances, along with separate deals with three other airlines, would lift its market share of flights into and out of Australia to nearly 30 percent by July 2012, putting it marginally ahead of the Qantas-backed OneWorld airline alliance.
Qantas, which is seeking to establish a premium airline through an Asian hub, had written to the ACCC stating that it didn't oppose the alliance. The regulator noted that at present, Virgin and Singapore compete on only a limited number of routes.
It also said that while Singapore Airlines has a 32.84 percent shareholding in Tiger Airways, which competes with Virgin on a number of Australian routes, the alliance "is unlikely to lessen Tiger Airways Australia's incentive to compete in the domestic market".
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