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Virgin Australia has received a tentative green light to work more closely with its British counterpart Virgin Atlantic on flights between Australia and London, with the Australian Competition and Consumer Commission saying it is prepared to allow the partnership for a five year period.
The draft determination would allow Virgin Australia and Virgin Atlantic "to more closely cooperate on services between Australia and the UK/Ireland via mutual mid-points in Hong Kong, Los Angeles and any other future mutual connection point", the ACCC said in a statement.
The ACCC described the airlines as "separate businesses that do not operate overlapping services on any routes and are unlikely to do so in the future."
This would not only be unlikely to"result in any significant detriment to competition on existing or future routes between Australia and the UK/Ireland," but "allowing the two carriers to more closely cooperate is likely to result in public benefits – in particular, an enhanced product and service offering including better scheduling and greater loyalty program benefits."
Virgin Australia has described the alliance as offering "a unique Virgin experience" for travellers on the popular Australia-London route.
An airline spokesperson previously told Executive Traveller that under the deeper partnership, passengers should expect "more competitive pricing on flights between Australia and the UK/Ireland via Hong Kong or LA and enhanced reciprocal frequent flyer arrangements, amongst other benefits."
How this will play out for business travellers
From a local perspective, the tie-up would see Virgin Australia passengers encouraged to join Virgin Atlantic's London-bound flights at either Los Angeles or Hong Kong – and could eventually lead to 'around the world with Virgin' bookings.
The two airlines already operate a codeshare agreement which plants their respective VA and VS codes onto each other's Hong Kong and Los Angeles flights, along with an reciprocal frequent flyer arrangement.
However, the deeper partnership will allow the airlines to work more closely together on joint pricing, scheduling and marketing, as well as 'product alignment' and joint pitching for corporate contracts.
Both airlines will aim for 'a seamless customer experience' by standardising baggage entitlements, meals and seat selections across the board, and co-locate check-in, baggage collection and lounge services where possible – especially in Hong Kong, where Virgin Australia is exploring whether it can use the same lounge as Virgin Atlantic in the main terminal (which is currently the Plaza Premium First Lounge).
Booking Virgin Atlantic flights with Velocity Points online would also be made possible under the new arrangement – a major improvement under the current system where Velocity members are required to phone up to check for reward seat availability on a flight-by-flight basis.
Virgin Australia is toying with the idea of implementing a unique 'reciprocal points upgrade proposition', where travellers with healthy Velocity Points balances can also elect to upgrade their Virgin Atlantic legs to Upper Class, which is currently being refitted across the fleet.
Virgin Atlantic has previously flown from London to Sydney via Hong Kong but pulled the plug on that route in 2014.
Current codeshare agreements mean passengers can book a journey from Australia to Hong Kong with Virgin Australia and onwards to Europe with Virgin Atlantic on the one booking, but the flight timings and different lounge access policies make it a particularly uninviting option for time-strapped business travellers.
Additional reporting by David Flynn
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