Thursday, December 1, 2011

Virgin Australia-Singapore Airlines Pact Gets Final ACCC Stamp

Australia’s competition regulator has given its final nod for an alliance between Virgin Australia and Singapore Airlines, saying it will boost competition. Meanwhile, SIA’s subsidiary Scoot announces to kick off with Sydney-Changi flights.

Virgin Australia and Singapore Airlines have been provided with the final authorization required to form an alliance.

Australian Competition and Consumer Commission (ACCC), Australia’s competition regulator, gave the green signal for the deal on Thursday saying the tie-up is likely to augment competition for international air travellers. In October, the regulatory body gave its preliminary approval for the alliance.

This will enable the two carriers to cooperate on pricing, scheduling, marketing and sales on Australia-Singapore flights as well as international and domestic connections.

Travel analysts believe that the pact is likely to cause concern to Qantas Airways, which is the biggest competitor to Virgin Australia in the segment. However, it sure spells good times for budget conscious passengers as amplified competition is expected to bring in cheap flight tickets for the travellers.

ACCC Chairman Rod Sims was quoted in a statement: “The ACCC considers that the alliance is likely to lead to increased competition for international air passenger services.”

ACCC said the alliance would “be attractive to both corporate and government passengers” and is unlikely to be anti-competitive in any of the relevant markets.

Virgin Australia CEO John Borghetti welcomed the ACCC’s stamp of approval: “This is excellent news for Australian travellers as it provides our guests with access to around 70 additional destinations across Asia, India and Africa, with one of the best airlines in the world.

“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 and we will jointly promote these destinations”, Mr Borghetti said in a press release.

Mr Borghetti further spoke of the benefits that travellers are set to enjoy because of the alliance.

“Through reciprocal codeshare, frequent flyer recognition and lounge access with each of our alliance partners, Virgin Australia will be able to offer guests a first-rate seamless travel experience that spans the globe with four of the world’s best airlines”, he said.

SIA’s Scoot to Offer Sydney-Changi flights

In different yet not completely unrelated news, Singapore Airlines’ long haul budget airline Scoot announced to commence its operations by offering flights to Sydney, Australia. Scoot, launched last month, said it is planning to operate daily flights to Sydney from Singapore's Changi airport from the mid of 2012.

Cheap flight tickets will be on cards as the airline promises to offer air tickets up to 40 percent lower than full-service airlines. Initially, Scoot will be operating its services with a fleet of four Boeing 777s which it plans to expand to 14 by 2015.

New Zealand, North Asia, Europe and India are other potential destinations that have been named by Singapore Airlines’ long haul low cost subsidiary.


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