Virgin Australia and its UK sibling Virgin Atlantic have asked Australia’s competition regulator to approve a much closer partnership between the two carriers, which would see travellers enjoy more benefits when flying with the airlines between Australia / New Zealand and the UK / Ireland.

Right now, the two airlines have a codeshare agreement which allows customers to travel between Australia and the UK under the one booking. Virgin Australia transports passengers from Australia to Hong Kong or Los Angeles, where Virgin Atlantic takes over with direct flights to London, and vice-versa.

When this codeshare agreement was announced last year, there were a few glaring problems, including restricted lounge access and potentially lengthy layovers in Hong Kong and LA.

The airlines are now seeking to address this and make other improvements to be more competitive. Specifically, they want approval to cooperate more closely on pricing, inventory management, scheduling, network planning (including launching new codeshare routes), airport operations, marketing and frequent flyer arrangements.

The airlines argue that customers will benefit through:

  • cheaper tickets
  • “product enhancements” in both the airport and on-board, including in relation to baggage allowance, seat allocation, meal requests, check-in and boarding processes, and lounge access
  • better status recognition
  • improved access to reward seats and upgrades, including via online reward seat bookings (right now, you have to book via a call centre) and the ability to use points to upgrade on each other’s flights (this would be pretty unique – I’m not aware of any other airlines that allow this)
  • better scheduling, including reduced connection times and possible new services, such as more codeshare routes in Australia/New Zealand and UK/Ireland.

The airlines have sought interim approval from the competition regulator and a decision on this is due in July. A final determination is expected in November.

I doubt the regulator will stand in the way of this proposal, given the huge level of competition on these routes and the clear benefits for customers.

This would also help Virgin Australia’s Hong Kong flights be more sustainable, as right now they are reportedly struggling to fill the planes.

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