US blocks Virgin Blue-Delta tie-up

US blocks Virgin Blue-Delta tie-up

The US Department of Transport (DOT) has blocked the proposed joint venture between Virgin Blue and Delta Air Lines. The carriers had applied for anti-trust immunity on trans-Pacific routes, however the DOT concluded that the deal, which would have seen the airlines coordinate their scheduling and pricing on routes between Australia and the US, would not benefit consumers. “Both airlines will be working with DOT over the next 14 day period to respond to the concerns raised,” said Virgin Blue in a statement released today. “Virgin Blue strongly believes the proposed alliance with Delta would be good for customers.” The decision will come as a surprise to many, as the US authorities have recently become increasingly open to airline alliances, having approved similar tie-ups including the partnership between American Airlines and Japan Airlines. Both Delta and Virgin Blue’s long-haul brand, V Australia, began flying trans-Pacific routes last year, doubling the number of airlines serving Australia-US routes, and putting extra pressure on Qantas and United Airlines. Neither Qantas nor United are thought to have opposed the partnership, but Air New Zealand has reportedly expressed concerns over the deal.

Gary Marshall
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Gary Marshall
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