The Australian Competition and Consumer Commission (ACCC) has given authorisation for the extension of the Virgin Australia (VA, Brisbane International) – Singapore Airlines (SQ, Singapore Changi) alliance for another five years.
First announced and authorised back in 2011, the alliance allows either carrier mutual access to the other's network by virtue of codeshare agreements. In addition, members of Singapore Airlines’ KrisFlyer frequent flyer programme are able to earn and redeem miles on Virgin Australia flights, while Virgin Australia’s Velocity members can earn and redeem miles on Singapore Airlines-operated flights.
The ACCC said its review had focused on the relevant areas of competition, notably services between Australia and the United Kingdom/Europe, and Australia and Asia. It said Virgin Australia, lacking a physical presence on flights between Australia and the UK/Europe, acted as a reseller of seats on flights operated by Singapore Airlines and its other alliance partner, Etihad Airways (EY, Abu Dhabi International). As a result, it has limited influence over the price of services delivered on its behalf by its alliance partners. The VA/SQ partnership is also constrained by a number of other competing operators, it said.
Virgin Australia and Singapore Airlines had requested for the alliance to be extended for a ten-year period, however, the ACCC argued that in light of the dynamic nature of the aviation industry and Virgin Australia’s proposed expansion of services into Asia, the authorisation would be granted for five years instead.
