Description of Conduct
On 27 May 2022, the ACCC received an application for authorisation from Virgin Australia Regional Airlines Pty Ltd (VARA), Virgin Australia Airlines Pty Ltd (Virgin Australia), Alliance Airlines Pty Limited and Alliance Aviation Services Limited (Alliance Airlines) (together, the Applicants) to give effect to an extension of the Charter Alliance Agreement which provides for the joint tender and supply of services to corporate customers, principally for fly-in fly-out employees.
Under application AA1000615, the Applicants sought authorisation to continue to give effect to the Charter Alliance Agreement, in place since 2017, which would enable the Applicants to:
- Jointly bid for, and contract with, corporate customers, including:
a. joint pricing and scheduling of services for those customers
b. agreeing not to compete for each other’s specified pre-existing customers
c. agreeing for new charter opportunities, to cooperate and coordinate to bid jointly for the charter opportunity. Individual bids are permitted if a joint bid is not made.
- Agree not to supply services to each other’s key competitors, with some limited exceptions.
- Offer eligible passengers of those customers access to the Velocity frequent flyer program.
- Offer eligible passengers of those customers access to Virgin Australia’s airport lounges as part of an integrated corporate offering.
- Cooperate in relation to check-in, airport operations, airport handling, service policies and other matters to improve the overall quality of service offered to corporate customers, and
- Jointly optimise operations, including procurement and deployment of aircraft engines and spare parts, and maintenance and ground-handling services, to achieve cost savings and efficiencies.
On 8 June 2022, the ACCC granted interim authorisation to the Applicants to enter into, and give effect to, an extension of the Charter Alliance Agreement.
On 21 October 2022, the ACCC issued a draft determination proposing to deny authorisation.
On 2 November 2022, the date by which the ACCC must make a final determination was extended, with the agreement of the Applicants, until 24 May 2023.
On 5 May 2023, the ACCC issued a determination denying authorisation. The ACCC also revoked the previous interim authorisation and granted a narrower interim authorisation to allow the Applicants to continue to give effect to existing contracts for a short period of time until the determination comes into effect. A copy of the ACCC's determination including a summary of its reasons is available from the ‘Decisions' link below.
Applicant(s)
- Virgin Australia Regional Airlines Pty Ltd
- Alliance Aviation Services Limited
- Virgin Australia Airlines Pty Ltd (Use for all Virgin Airline entries)
- Alliance Airlines Pty Limited