VIRGIN Australia has earmarked the Mildura-Melbourne route as one of 41 regional routes it intends to resume under an agreement with Alliance Airlines.
Virgin abandoned the route at the end of March when the COVID-19 pandemic weakened travel demand before the carrier entered voluntary administration.
Virgin previously operated the only jet passenger service out of Mildura with one daily return flight to Melbourne.
In September this year, the company announced the Mildura-Melbourne service would be axed “for the foreseeable future”, however the company this week said it planned to reinstate the route with Alliance Airlines.
The Australian Competition and Consumer Commission (ACCC) on Thursday granted interim authorisation to Virgin Australia and Alliance Airlines, allowing them to co-operate on 41 regional routes and two short-haul international routes.
The ACCC said its preliminary view was that the arrangements were likely to result in a public benefit by assisting the re-establishment of Virgin Australia’s national network of routes, thereby promoting competition in airline services.
ACCC commissioner Stephen Ridgeway said the COVID-19 pandemic had significantly disrupted the aviation industry in Australia.
“This interim authorisation will help facilitate a more competitive aviation landscape as Australian consumers resume travelling and demand for flights increases,” Mr Ridgway said.
The co-operation will allow Virgin Australia and Alliance Airlines to share information, and to agree on service capacity, schedules and potentially revenue sharing on the routes on which they operate, including for new routes not currently serviced by either airline.
“Co-operating to provide services on these regional routes will assist Virgin Australia and Alliance Airlines to efficiently manage capacity and quickly respond to increases in demand as travel restrictions ease,” Mr Ridgeway said.
“We acknowledge there is some urgency to this matter — a delay in Virgin Australia fully re-establishing its network, while other airlines are increasing services in response to greater demand as travel restrictions ease, is likely to result in less competitive markets.
“This is why we have given this arrangement interim authorisation while we consider the substantive application.”
The co-operation will mean that Virgin Australia and Alliance Airlines will not compete with each other on the routes covered by the agreement.
“Our preliminary view is that any public detriment resulting from reduced competition between Alliance Airlines and Virgin Australia is likely to be limited, given Alliance Airlines’ limited number of scheduled regular passenger services,” Mr Ridgeway said.
“We will consider this issue further in the course of our review of the substantive application.
“We consider that other airlines, including Qantas Airways and Qantas-owned Jetstar, are likely to compete strongly with Alliance Airlines and Virgin Australia on many of the routes covered by the agreement.”
