Virgin Australia has revealed details of how it intends to market itself on international routes and compete with Qantas on routes to the Americas, Europe and Asia, with partner airlines.
Details were outlined in a 24-page submission to the Australian competition watchdog as part of its application for a new codeshare arrangement with United Airlines across the Pacific and beyond. That partnership was announced in mid-December, and had hoped to commence by April 2022.
Virgin Australia is now seeking interim authorisation for its alliance with United to commence 13 May 2022, and for an initial period of five years.
“It is commercially important for the Applicant to commence codeshare services with United Airlines by this time in circumstances where there is likely to be an increase in demand for travel to and from Australia as international travel rules are relaxed and the northern hemisphere’s summer travel season begins,” Virgin Australia said in its application dated 14 April.
The partially redacted submission also indicates Virgin Australia intends to align with other “former and new partners” to expand its reach beyond short-haul routes which it is limited to due to its existing fleet of narrowbody aircraft.
During the pandemic, Virgin Australia ceased all long-haul international flights and ended its lease agreements for its wide-body fleet. It has restarted flights to Nadi, Fiji and is planning to resume Bali, Indonesia flights in mid-June 2022.
In its submission to the Australian Competition and Consumer Commission, Virgin Australia refers to a new kind of codeshare agreement with “Partner Carriers” which contains pricing provisions that may trigger the prohibition against resale price maintenance.
“The Proposed Conduct will enable Virgin Australia, together with its Partner Carriers, to market a comprehensive network of international flight itineraries to Australian consumers and create stronger incentives to price codeshare fares competitively, in circumstances where Virgin Australia’s ability to offer long-haul international travel has been significantly impaired by the COVID-19 pandemic and circumstances surrounding its administration,” the airline told the ACCC.
The new, prospective and revived partnerships “will provide Virgin Australia with the ability to recommence international services through a virtual network on its own code.”
“Virgin Australia does not at present have the widebody aircraft required to operate substantive long-haul operations. Until it is able to do so, the Proposed Conduct will provide Virgin Australia with the opportunity to offer international services to its customers and maintain its brand presence as a full service international and domestic Australian airline,” VA said.
The ACCC expects to hand down a decision on interim authorisation this month. A draft determination on the proposed conduct is flagged for June.