FIVE-YEAR EXTENSION FOR VIRGIN AUSTRALIA AND SINGAPORE AIRLINES ALLIANCE

Written on the 26 September 2016

FIVE-YEAR EXTENSION FOR VIRGIN AUSTRALIA AND SINGAPORE AIRLINES ALLIANCE THE Virgin Australia (ASX: VAH) and Singapore Airlines alliance has been granted a five-year extension by the Australian Competition and Consumer Commission (ACCC).

The airlines applied for a 10-year extension in May this year, as the existing approval expired in December 2016 after being first granted in January 2012.

In its determination, the ACCC says that due to the rapidly evolving nature of the industry, it is appropriate to review the authorisation earlier than the requested 10 years.

It noted there was limited overlap between the two airlines on international routes - the Australia-Denpasar route is the only one where the two airlines have competing services.

However, Virgin flies direct to Bali, while Singapore Airlines has an indirect service to the same location, stopping in Singapore. Additionally, where both airlines provide indirect routes to international locations, there are rivals operating similar services.

Virgin Australia Group CEO, John Borghetti (pictured), says, "We welcome the ACCC's assessment that the alliance has and will continue to result in material public benefits through enhanced products and services and the promotion of competition in international air travel."

Since the alliance began in 2012, the two companies have introduced new services between Singapore, Cairns, Canberra and Darwin; have increased the frequency of routes between Australia and Singapore by 30 per cent and made a 12 per cent increase in capacity; and have added destinations in Asia, Europe and South Africa.

Virgin is trading down 1.25 per cent this morning, at $0.237 per share. Since the end of 2015, the company has dropped in value by more than 50 per cent.

Virgin Australia is 84 per cent owned by a consortium of six companies: Etihad Airways, Nanshan Group, Singapore Airlines, HNA Group, Virgin Group and Air New Zealand.



Latest News

BOQ WILL BOUNCE BACK, CEO SAYS

MORTGAGE growth of 30 per cent or greater will drive an improvement in the second half for the Bank of Queensland ...

STARSHIPS WERE MEANT TO DELIVER DOMINO'S PIZZA

NICKI Minaj may have been off the mark when she declared 'starships were meant to fly'. However, she m...

QUEENSLAND WEATHER UPDATE: MAJOR AIRPORTS STILL IN BUSINESS DESPITE CANCELLATIONS AND DELAYS

DESPITE the storms and flash floods which are continuing to wreak havoc across several Queensland cities and towns...

STARS ALIGN AS GOLD COAST ICON REBRANDS

TODAY marks a shift in the Gold Coast's constellation as the iconic Jupiters Hotel and Casino officially rebra...

Related News

STARSHIPS WERE MEANT TO DELIVER DOMINO'S PIZZA

NICKI Minaj may have been off the mark when she declared 'starships were meant to fly'. However, she m...

RAY OF HOPE FOR SLATER AND GORDON AS LENDERS STEP IN

EMBATTLED law firm Slater and Gordon (ASX: SGH) has announced to the ASX that it has launched confidential discussion...

SPROUTX PROVIDES THE SEED FOR AGTECH STARTUPS

AGTECH innovation fund SproutX has opened applications for its first accelerator round, backed by $10 million from...

GAS PRICES MAY FORCE BRICKWORKS TO TAKE MANUFACTURING OVERSEAS

BRICKWORKS Limited (ASX:BKW) chairman Robert Millner says soaring energy prices may force the company to turn to offs...

EVENTS COMING UP

 

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter