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Singapore Airlines alliance with Virgin Australia gets ACCC blessing
The Australian Competition and Consumer Commission (ACCC) has granted authorisation for Virgin Australia and Singapore Airlines (SIA) to enter into an integrated network aviation alliance.
For business travellers it means earning and redemption of frequent flyer miles on SIA and Virgin Australia flights by the end of the year and codesharing is expected to commence early next year.
Under the alliance, SIA and Virgin Australia will codeshare on each other’s international and domestic flights, offer reciprocal frequent flyer programme benefits and lounge access and co-ordinate schedules between Singapore and Australia and beyond to provide seamless connections.
Commercially, it means joint sales, marketing and distribution activities.
Draft approval was awarded by the ACCC on October 13. On October 20 the Competition Commission of Singapore announced its approval of the alliance.
"The ACCC considers that the alliance is likely to lead to increased competition for international air passenger services," ACCC chairman Rod Sims said.
Under the alliance, the airlines will cooperate on all aspects of their Australia–Singapore services and any international and domestic connecting routes, including joint pricing and scheduling and joint marketing and sales.
"The ability to offer a comprehensive international and domestic network, along with enhanced frequent flyer and lounge products, is likely to be attractive to both corporate and government passengers," Mr Sims said.
The ACCC view is that the alliance is unlikely to be significantly anti-competitive in any of the relevant markets. The parties currently compete on a limited number of routes where competitor airlines are in a position to constrain the alliance’s price and service decisions.
While noting SIA’s shareholding in Tiger Airways Holdings, the ACCC considered that the alliance was unlikely to lessen Tiger Airways Australia’s incentive to compete in the domestic market.
Authorisation provides immunity from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act 2010. Broadly, the ACCC may grant an authorisation when it is satisfied that the public benefit from the conduct outweighs any public detriment.
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