Delta Air Lines today said the Australia Competition and Consumer Commission approved its antitrust-immune joint venture with Virgin Blue Airlines Group, though the U.S. Department of Transportation has yet to similarly bless the arrangement announced in July.
"Delta and V Australia are eager to move forward with their joint venture, and to bring new services to the market," Delta said today in a statement. "We look forward to a similar decision from the U.S. Department of Transportation and urge the DOT to quickly conclude its review so consumers can begin to enjoy the important benefits of the alliance identified by the ACCC."
DOT last month issued an order asking Delta and its potential joint venture partner for more information on their application for antitrust immunity. "We find that the additional information is necessary to analyze the application and make a decision," DOT wrote in the order last month.
Only after Delta and the Virgin group submit further information will DOT "establish a procedural schedule for comments and other such responsive pleadings necessary to act on the application," a process that could drag on for months if previous antitrust immunity applications are any indication.
Newcomers this year to U.S.-Australia routes Delta and the Virgin group in July announced plans to form the joint venture as a competitive alternative to Qantas Airlines and United Airlines, the carriers with the highest marketshare between the two countries. The carriers proposed immunity from antitrust laws so they can jointly cooperate "in the areas of planning, revenue and pricing, yield management, marketing and operations"
(BTNonline, July 27). The structure is similar to joint ventures that have grown prominent among alliance partners on the U.S.-EU routes.
In its draft approval last month, ACCC proposed to grant authorization to the carriers "for a limited period of three years" to ensure public benefits are realized.
"The ACCC considers that the joint venture is likely to assist Virgin Blue and Delta to compete more effectively against the incumbents on the routes, Qantas and United Airlines," ACCC chairman Graeme Samuel said in a statement upon the ACCC's draft approval, which Delta indicated the commission finalized this month. "The entry of Virgin Blue and Delta on the transpacific routes has created strong competition on price and service in the market for passenger transport. The ACCC expects that this would continue to be the case under the new arrangements to the benefit of consumers," Samuel concluded.