Virgin has partnered with Link Airways to resume its service between Sydney and Canberra, which it paused at the start of the pandemic.
The news comes alongside the ACCC giving the larger airline permission to collaborate with Alliance on 41 routes, including between the NSW and ACT cities.
The decision could potentially anger Rex, which strongly criticised the competition commission’s decision and expanded into the same route itself earlier this year. There is no suggestion any airline has broken any rules.
From 30 January 2022, Virgin will operate more than 50 services a week between the two cities under an exclusive agreement with Link, which will use its 34-seat Saab 340 B Plus aircraft.
Customers on the short flights, which will run up to nine times on weekdays, will receive complimentary tea, coffee and water.
“The agreement with Link Airways will extend the Virgin Australia domestic network reach into markets like Sydney-Canberra that its own 737-800 aircraft cannot serve effectively,” said Virgin in a statement.
“As the airline quickly ramps up capacity across domestic and short-haul international services it will continue to evaluate new destinations and opportunities to connect Australia.
“Since September, Virgin Australia has launched 15 new services, some of which have never been operated in the airline’s 21-year history, as the revitalised business takes flight under new ownership.”
Virgin Australia Group CEO Jayne Hrdlicka said the service will provide more than 16,000 seats each month and eligible customers will have access to Virgin’s Canberra lounge.
Virgin’s decision to partner with Link comes alongside the ACCC granting authorisation for Virgin and Alliance to collaborate on 41 regional routes, including Sydney – Canberra.
The deal allows the two airlines to share information on cost, capacity, and flight schedules with Alliance in order to help serve smaller towns with its post-administration, stripped back fleet.
In its initial ruling, the ACCC said, “The co-operation will allow Virgin Australia and Alliance Airlines to share information, and to agree on service capacity, schedules and potentially revenue sharing on the routes on which they operate, including for new routes not currently serviced by either airline.
“The co-operation will mean that Virgin Australia and Alliance Airlines will not compete with each other on the routes covered by the agreement.”
In April 2021, it granted final permission for the tie up until March 2023.
Qantas held an effective monopoly on flights between the two cities until Rex launched its own service earlier this year, accusing Qantas of “fare gouging” and overcharging customers.
Rex said it would initially fly seven return flights a day between Canberra and Sydney from 19 April, but could increase that to 10.
It has begun reinstating domestic services, including using its 737s, since mid-November, and is currently operating 15 flights per week between the two cities.
Qantas currently flies a mixture of larger 717s and smaller Dash 8s on the route.