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Virgin-SIA tie-up approved by competition watchdog

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Virgin Australia and Singapore Airlines’ (SIA) proposed alliance cleared the first hurdle on Thursday, after the competition regulator gave the tie-up the green light.

The move brings Virgin a regulatory step close to gaining access to SIA’s vast network within Asia, one of the fastest-growing aviation markets in the world.

In a draft ruling, the Australian Competition and Consumer Commission (ACCC) said the Virgin-SIA partnership would help benefit the public through likely new routes and increased options for passengers.

The two carriers would be free to cooperate on pricing, scheduling, marketing and sales on Australia-Singapore services and international and domestic connecting flights, should the ACCC grant final approval, and the Competition Commission of Singapore (CCS) do likewise.

“The ACCC also considers that the alliance is likely to make Virgin Australia more competitive with other airlines, including Qantas,” ACCC chairman Rod Sims said in a statement on Thursday.

The two airlines would also codeshare on each other’s flights, giving Virgin access to SIA’s network within Asia.

Alliances with international airline partners have been a key plank in chief executive John Borghetti’s bid to capture a greater slice of the corporate travel for Virgin Australia, in a market segment dominated by Qantas.

Virgin, Australia’s number two carrier, already has regulatory approval for partnerships with Etihad Airways, Air New Zealand and Delta Air Lines.

Mr Borghetti said he expected the latest alliance to help boost tourism as the two airlines promoted Australia throughout Asia.

SIA regional vice-president south west pacific Subhas Menon said the partnership with Virgin would benefit leisure and corporate travellers, given there would be more attractive and competitive travel options.

Since August, the two airlines have offered reciprocal lounge access to their frequent flyers, and established an interline agreement.

The application before the Singapore regulator was still pending, according to the CCS website.

Virgin closed up one cent at 32.5 cents.