The Australian Competition and Consumer Commission (ACCC) has granted interim approval for a “codeshare pricing arrangement” between Virgin Australia and United Airlines.
According to a statement released by the commission, the codeshare partnership will allow both carriers to “put their code on passenger flight services operated by the other, extending each other’s networks across both sides of the Pacific”.
The commission sees the partnership as a “public benefit” as Virgin Australia seeks to rebuild its international operations.
The ACCC’s decision is a response to an initial application lodged by Virgin Australia Airlines on April 14, 2022.
“The ACCC’s preliminary view is that this proposed codeshare arrangement with United Airlines is likely to result in a public benefit as it will help Virgin Australia re-establish its international network,” said ACCC commissioner Stephen Ridgeway. “Currently, it appears that Virgin Australia is unlikely to be able to operate its own long-haul international services in the short term.”
Additionally, the approval grants United Airlines the ability to “set the fares at which Virgin Australia may sell the services operated by United Airlines, whether those services are sold as a standalone itinerary or as part of an itinerary that includes flight segments operated by Virgin Australia”.
The commission highlights that the carriers’ partnership is not likely to “lessen competition as there is no operational overlap on any routes between Virgin Australia and United Airlines and there are other airlines operating on the routes”.
Fleet and network expansion
Virgin Australia currently operates a fleet of Boeing 737-700 and 737-800 aircraft, as well as Airbus A320 and a fleet of F100 aircraft. In April, the airline announced that it expects to grow its fleet by 50% to 88 aircraft, up from 58 aircraft.
Virgin Australia also has 25 Boeing 737 MAX 10 aircraft on order and looks to phase out its Boeing 737-700 fleet from the first Quarter of 2023.
The airline deploys its fleet on domestic services and limited short-haul international services to Nada, Fiji, and expects to resume flights to Bali, Indonesia from June 2022.
However Virgin Australia does not operate any long-haul international services and is unlikely to do so in the short to medium term, as it does not have access to the widebody aircraft necessary to begin operating such services, said the ACCC.
United Airlines operates daily long-haul services between Australia and the United States. This includes its services on its Sydney-Los Angeles route and the Sydney-San Francisco route.
The US Carrier expects to re-open its Melbourne-San Francisco services in June 2022.
Virgin Australia has also been busy establishing partnerships in a bid to expand its network following its announcement of a codeshare partnership with Qatar Airways.
In a statement released by Virgin Australia on May 10, 2022, Qatar Airways passengers will have “increased travel options and benefit” across 35 destinations in Australia, while Virgin Australia passengers will gain access to over 140 destinations worldwide.
The partnership with Qatar Airways is expected to commence in the latter half of 2022.