The Australian Competition and Consumer Commission (ACCC) has issued a draft approval of a proposed alliance between Virgin Australia (VA, Brisbane International) on the one side and China's HNA Group, Hong Kong Airlines (HX, Hong Kong International) and Hong Kong Express (Hong Kong International) on the other which would allow the two groups to coordinate international passenger transport services between Australia and mainland China, and Australia and Hong Kong. The draft authorisation is for a period of five years.

Virgin Australia currently serves fifteen international destinations, but does not operate any direct flights to China or Hong Kong. Virgin plans to launch a direct Melbourne Tullamarine – Hong Kong International service in July 2017, pending the necessary approvals. This route is currently served by Cathay Pacific (CX, Hong Kong International) and Qantas (QF, Sydney Kingsford Smith), with a weekly seat capacity of 7,674.

Under the Alliance, the airlines will codeshare on each other's networks between Australia and China, agree interline arrangements, undertake strategic route and network planning, and cooperate in relation to marketing and sales. Additionally, Virgin will enter into reciprocal special prorate agreements with Hong Kong Airlines, Hainan Airlines (HU, Haikou), Capital Airlines (China) (JD, Beijing Daxing International) and Tianjin Airlines (GS, Tianjin).

Only New Zealand's JumpJet Airlines, a proposed start-up, objected to the proposed Alliance, while Air China (CA, Beijing Capital) publicly raised the concern that it could restrict competition for feeder traffic. Both Air China and Cathay Pacific said that a ten-year authorisation was too long - as a result of which the ACCC has granted a five-year approval.

The draft approval is now open to comment, and is likely to be finalised in July 2017.

In a statement, Virgin Australia Group CEO John Borghetti said that the new alliance will provide greater competition and choice to travellers. "When the alliance is in place, guests will enjoy an expanded network of destinations across Australia, mainland China and Hong Kong," Borghetti said. "The alliance will also enable Virgin Australia to accelerate its access to the Chinese travel market and work with HNA in driving inbound visitors to Australia, which will benefit our tourism industry and broader economy."