Australia’s competition regulator has approved the alliance between Virgin Australia and Etihad for a further five years.
The Australian Competition and Consumer Commission (ACCC) handed down its final decision on Friday, after giving the partnership the green light in a draft ruling at the end of October.
Under the tie-up, which was first forged in February 2011, the two airlines have extensive codeshare arrangements on each other’s networks, giving Virgin access to Etihad-operated flights to Europe and the Middle East, while Etihad gains offline destinations across Australia, New Zealand and the Pacific. There are 89 codeshare destinations under the alliance.
There are also reciprocal frequent flyer benefits such as lounge access, priority checkin and extra luggage allowance.
However, the two carriers do not share revenue under the alliance.
Currently, Etihad flies daily to Perth and Brisbane, double daily to Melbourne and 11 times a week to Sydney from its Abu Dhabi hub. Virgin operates three flights a week between Sydney and Abu Dhabi.
“The ACCC considers that this alliance would be likely to continue to deliver public benefits by promoting competition and enhancing the products and services offered to customers travelling between Australia and the Middle East and onward to destinations throughout Europe,” ACCC chairman Rod Sims said in a statement on Friday.
“The ACCC accepts that Virgin would not operate services to Abu Dhabi if this partnership with Etihad did not exist. Virgin could not offer a viable service on the route without offering the connections available on Etihad’s network within the Alliance.”
Virgin Australia chief executive John Borghetti welcomed the ACCC’s decision.
“Since the launch of the alliance five years ago, we have introduced more codeshare destinations, delivered further enhancements to the customer experience and more than doubled seat capacity between Australia and Abu Dhabi,” Borghetti said in a statement.
Etihad holds about 25 per cent of Virgin and is one four major shareholders alongside Sir Richard Branson’s UK-based Virgin Group (about 10 per cent), Singapore Airlines (23 per cent) and Air New Zealand (26 per cent)
Earlier in 2015, Virgin won regulatory approval to extend its partnership with Delta Air Lines on trans-Pacific routes, while its partnership with Air New Zealand across the Tasman received the green light in March.
Virgin’s partnership with Singapore Airlines was approved by the ACCC in 2011 and is valid for five years.