Friday, July 24, 2009

Opposition to Proposed U.S./Australia Joint Venture

Amidst the the ballyhoo surrounding Continental Airlines's (mostly) successful bid to win approval and antitrust immunity for its participation in the Star Alliance, see previous blog post here, little notice has been paid to the approval and immunity application filed by the U.S.'s Delta Airlines and Australia's Virgin Blue, V Australia, and Pacific Blue (which also has operations in New Zealand).  See Dkt. No. OST-2009-0155, Application for Approval of and Antitrust Immunity for Alliance Agreements (July 9, 2009) [hereinafter Joint Application].  The application avails itself of the 2008 U.S./Australia Air Transport Agreement, 3 Av. L. Rep. (CCH) ¬∂ 26,207g, at 21,850 (Feb. 14, 2008), which--according to the application--"fundamentally changes the competitive market structure between the U.S. and Australia, establishing a solid framework for expanded transpacific competition by Australian and U.S. airlines," Joint Application, supra, at 9. 

While no major party on the U.S. end (including the Department of Justice) has come forward to oppose the venture before the Department of Transportation, there is a report out that Air New Zealand "will fight what it has described as [the airlines' proposed] collusion on fares and capacity."  Matt O'Sullivan, Virgin Delta Tie-Up Opposed, Dominion Post, July 25, 2009 (available here).  Also joining the clamor against the proposed alliance is Singapore's Tiger Airways.  See id.  The airlines are hoping that the precedent set by the Australian Competition and Consumer Commission's 2008 rejection of an Air New Zealand/Air Canada cooperative arrangement will spell defeat for the new transpacific link-up.  Id.  No indication was given by the report when a decision on the matter is expected.

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