Virgin Delta tie-up opposed

BY MATT O'SULLIVAN
Last updated 05:00 25/07/2009

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Virgin Blue is facing mounting opposition to its planned tie-up with United States carrier Delta Air Lines on the Australia-US route, after Air New Zealand said it would fight what it has described as collusion on fares and capacity.

Air New Zealand's formal opposition comes days after Singapore Airlines-backed Tiger Airways declared it would lodge objections to the joint venture with regulators.

Virgin and Delta, the world's largest airline, unveiled plans two weeks ago to form a revenuesharing agreement under which a steering committee would manage the carrier's aircraft on the trans-Pacific route.

But Air New Zealand's general counsel, John Blair, said the proposed joint venture would be anti-competitive, and that most of the benefits the airlines had outlined in their regulatory filings could be achieved through arrangements such as code-sharing.

Air New Zealand offers indirect services between Australia and Los Angeles via Auckland.

The Australian Competition and Consumer Commission last year rejected plans for a "co-operation agreement" between Air New Zealand and Air Canada on the Sydney-Vancouver route.

"The ACCC's analysis in that instance, if consistently applied to the Virgin-Delta proposal, indicates that this new application is unlikely to succeed," Mr Blair said.

Delta began flights between Sydney and Los Angeles on July 3, four months after Virgin started services across the Pacific. Sydney Morning Herald

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- The Dominion Post

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