Australia's competition regulator on Thursday gave the green light to a tie-up between Singapore Airlines and local carrier Virgin Australia, ruling it would be a boost for international air travel.
Virgin Australia welcomed final approval of the "wide-ranging" alliance, which will expand its reach to an additional 70 destinations in Asia, India and Africa.
"The alliance will also be positive for tourism in Australia as it will enable us to provide Singapore Airlines' customers with seamless travel through to over 30 destinations around Australia," said Virgin chief John Borghetti.
Singapore is stepping up its competition in the Australian market, announcing earlier Thursday that Sydney would be the first route for its new budget offshoot Scoot, throwing down the gauntlet to rival Qantas and Jetstar.
The tie-up will see Virgin and Singapore cooperate on all aspects of their Australia-Singapore services and any international or domestic connecting route, including pricing, marketing, scheduling and sales.
The Australian Competition and Consumer Commission (ACCC) said the alliance "is likely to lead to increased competition for international air passenger services".
"The ability to offer a comprehensive international and domestic network, along with enhanced frequent flyer and lounge products, is likely to be attractive to both corporate and government passengers," said ACCC chairman Rod Sims.
He noted that Singapore had a major holding in local budget carrier Tiger Airways Australia but said the Virgin link was unlikely to impact on Tiger's incentive to compete in the domestic market.
Virgin said reciprocal frequent flyer schemes would begin by the end of 2011 and codesharing early next year.
Together with recently approved alliances with Etihad, Air New Zealand and Delta, Virgin said the Singapore deal had now increased its global coverage from 60 destinations to more than 400 worldwide.
by Jan Flemr
(c) 2011 AFP
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