ACCC Reauthorizes Virgin Australia-Etihad Alliance until December 2020
9th Dec 2015
The commercial alliance between Virgin Australia and Etihad will continue for at least five more years, after the Australian Competition and Consumer Commission (ACCC) have reauthorized their partnership.
The ACCC's ruling stems from its initial approval from 30th October and will grant the two airlines antitrust authority, while also covering scheduling between Australia and the Middle East and joint pricing. The extended partnership will not include revenue sharing.
Explaining its decision, the ACCC said Virgin-Etihad cooperation promotes competition and better products on the routes flown by these two airlines, and their partnership is therefore of public benefit.
ACCC Chairman Rod Sims said the following:
"The ACCC accepts that Virgin would not operate services to Abu Dhabi if this partnership with Etihad did not exist. Virgin could not offer a viable service on the route without offering the connections available on Etihad's network within the alliance."
The Virgin Australia-Etihad alliance was previously authorized back in February, 2011 and it needed to be cleared to in order to continue past 25th February next year. The approval now runs until the end of 2020 (30th December).
Through the partnership, Virgin and Etihad offer codeshare services to a total of 38 cities in Europe, the Middle East, Pakistan and Africa, as well as 52 destinations in Australia and Asia.
The two airlines also work together on marketing and sales, flight and cabin crew secondments and frequent flyer programs.
Etihad has a quarter (25.1%) equity share in Virgin Australia Holdings, after having increased its presence there for the past couple of years.
President and CEO of Etihad Airways James Hogan said:
"Over the next five years, our focus will be on new areas of commercial cooperation with Virgin Australia and opportunities for increased public benefit."