V Australia/Delta Flights Alliance Blocked In US

V Australia/Delta Flights Alliance Blocked In US

It’s the quickest way to get there, but change often comes slowly in air travel. V Australia and Delta announced their plans to establish a joint venture for Australia-US flights in July 2009, and got ACCC approval late last year. However, those plans have hit something of a snag with the US Department of Transportation rejecting the proposal because of antitrust concerns.

The DOT argued that the proposed co-operation between the two airlines wouldn’t necessarily benefit consumers:

Delta and its partners have only recently entered the U.S.-Australia market, have not shown developed plans to operate as commercial partners, and have limited their cooperation to a handful of routes, thereby limiting the public benefits their alliance might produce. The Department also said that Delta and the Virgin Blue Group had failed to show that their alliance would have positive effects for consumers, such as lower fares or increased capacity.

V Australia and Delta will be working over the next fortnight to try and convince the DOT to reverse its decision before a final judgement is made.

I’m all for additional competition on the US route, but don’t claim to be an antitrust expert — it will be interesting to see if the airlines persuade the DOT to change its mind. The Delta/V Australia partnership already gives Virgin Blue flyers an international route for using frequent flyer points, though seat availability is an issue.


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