Friday, October 15, 2010

Australia Asks US To Approve Delta, Virgin Blue Airline Pact

The Australian government has formally asked U.S. officials to reverse their opposition to an alliance between Virgin Blue Holdings Ltd. (VBA.AU) and Delta Air Lines Inc. (DAL).

The U.S. Transportation Department last month said it planned to deny an application for antitrust immunity that would have allowed the airlines to cooperate on pricing, revenue management and marketing on trans-Pacific routes.

Australian competition officials approved the tie last December. The country's deputy transport secretary, Andrew Wilson, this week asked the Department of Transportation to approve the application, according to a regulatory filing.

Wilson said it was "extremely rare" for such applications to be rejected, and said the Delta-Virgin plan was consistent with the open-skies aviation treaty between the countries.

The case is being closely watched as it involves an airline outside of the three global alliances that dominate the global airline industry. Regulators have approved numerous antitrust applications involving members of the SkyTeam, Star and Oneworld groupings.

Delta is a member of SkyTeam, and has antitrust immunity with a number of European and Asian alliance partners, while Virgin Blue is unaffiliated.

U.S. officials said last month that the carriers hadn't demonstrated that the proposed alliance would produce sufficient public benefits, such as lower fares and increased capacity, to justify an exemption from U.S. antitrust laws.

Delta and Virgin Blue this week submitted additional information in support of their application.

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