Interim authorization given to Etihad Airways and Virgin Blue alliance


Airfares for new services between Australia and Abu Dhabi will go on sale from 1 October as interim authorisation was today given to the proposed alliance between Virgin Blue and Etihad Airways.

The Australian Competition and Consumer Commission’s (ACCC) preliminary approval will allow Virgin Blue and Etihad to begin promotion and preparations before the ACCC comes to a final decision on the carriers’ alliance.

Virgin Blue Group chief executive John Borghetti, who was reportedly confident the ACCC would not pass up the proposal, said the Virgin Blue Group of Airlines “will now be able to deliver an alternative and competitive network to the Middle East, Europe, United Kingdom and beyond”.

“This is an important milestone as we create a global international network, greater competition on the international landscape and benefit our guests with great value fares, better scheduling and more choice.”

ACCC chairman Graeme Samuel said the ACCC’s decision to grant interim authorisation was based on the fact that Virgin Blue and Etihad “do not operate any competing services” and needed “lead time…to market and sell tickets before the commencement of long-haul services”.

In a submission to the ACCC Qantas protested the request for interim authorisation of the alliance, claiming that, among other things, consumers booked on flights would suffer should the alliance be eventually denied.

Virgin Blue hit back, noting that in their original request for interim submission steps to deal with the outcomes of an unsuccessful bid were clearly defined, adding that, “If Qantas’s position [in opposition to the alliance] was to be adopted, it would simply have the self-serving result of delaying a pro-competitive initiative.”

According to Virgin Blue, under the alliance Etihad and V Australia will fly three weekly Sydney-Abu Dhabi services from February 2011 and three weekly Brisbane-Abu Dhabi services from February 2012, the first Australian carrier to offer direct flights to the Middle East since 1991.

The alliance would open up Etihad’s network of 65 destinations for Virgin Blue’s customers while Etihad customers will have access to the Virgin Blue Group’s 45 destinations.

The ACCC made clear that granting interim authorisation for the alliance was not indicative of final approval.