Virgin Australia has been given the go ahead to partner with its European counterpart, Virgin Atlantic. The two airlines sought to build on an existing codeshare agreement regarding flights between Australia and the UK/Ireland via their mutual hubs in Hong Kong and Los Angeles. Australia’s competition tsar, the Australian Competition and Consumer Commission (ACCC) gave the partnership an interim tick of approval four months ago. It has now given the partnership the final green light through to 2024.
A deepening of the working relationship between the two airlines
The ACCC’s final approval late last week will allow the two airlines to deepen their working relationship. They can jointly manage pricing, inventory, scheduling and marketing. Despite Virgin Atlantic flagging resuming flights back into Australia (the airline quit its Hong Kong – Sydney tag flight in 2014), the ACCC doesn’t think there will be any route overlap between the two airlines in the future.
In a statement provided to Simple Flying, the ACCC’s Commissioner, Stephen Ridgeway, said;
“The arrangements which have been authorized will not lessen competition on any route, and are likely to provide public benefits, including through improved scheduling and enhanced loyalty program benefits.”
Lots of water under the bridge since partnership first proposed
The initial application to extend cooperation dates back to June this year when things were a bit different at Virgin Australia. The airline was operating flights out of Sydney to Hong Kong and Los Angeles respectively, and a daily flight from Melbourne to Hong Kong. These three flights would both feed passengers onto Virgin Atlantic flights and take passengers off them.
Then two months later, Virgin Australia announced its seventh annual financial loss in a row, prompting an acceleration of a route and cost review announced earlier in 2019 when a new CEO, Paul Scurrah, took the reins at the airline.
Virgin Australia’s flights to Hong Kong are relatively new. The Melbourne – Hong Kong services began in 2017 and the Sydney – Hong Kong service commenced just last year. Both services have been dogged by poor passenger loads and financial underperformance, a situation that was exacerbated in recent months by the protests in Hong Kong.
Recently, Virgin Australia applied for and won a slot pair at Tokyo’s Haneda Airport, overnight changing the focus of their “Asian Pivot” from Hong Kong to Japan. Simultaneously, the airline announced a comprehensive codeshare arrangement with ANA.
Virgin Australia doesn’t have a lot of widebodied aircraft (six A330-200s and five Boeing 777-300ERs) and what they do have are worked fairly hard. Something would have to give to cater for the new Japan flights. The short money was on the Hong Kong flights, particularly the Melbourne – Hong Kong flights.
It came as no surprise when Virgin Australia axed its Melbourne – Hong Kong flights earlier this month. But it took away a core piece of route infrastructure in the Virgin Atlantic / Virgin Australia partnership. Some folks had already been asking whether the partnership would proceed as originally intended back in June, given Virgin Australia has so abruptly changed its focus to Japan and ANA since then.
The partnership seems to be on track
But neither airline has made any public statement about watering down the partnership. It still holds considerable value for both the two airlines and their passengers. You can effectively fly around the world with either of the airlines.
For example, you could take the evening Virgin Atlantic service out of London Heathrow (VS206), arriving into Hong Kong late the following afternoon. After a two and a half-hour transit in Hong Kong, the early evening Virgin Australia service (VA82) down to Sydney will land the following morning. The total travel time is just over 20 hours.
After a three and a half-hour transit and an a la carte breakfast in The House Lounge in Sydney, VA1 will whizz you across the Pacific to Los Angeles, arriving just in time for another breakfast on the same day. In LAX, it is a nine-hour wait to pick up Virgin Atlantic’s mid-afternoon service (VS24) back to Heathrow.
With the new partnership between Virgin Atlantic and Virgin Australia, you can now do this entirely with one airline, accruing points and status along the way. You could do it in reverse. You can also pivot out of both Melbourne and Brisbane for the transpacific sector. You’d just have to add a tag flight to Sydney to join the Hong Kong flight.
Whether you’d want to do this and spend 50 hours either in the air or hanging around airports is another point entirely. But if you must, the ACCC’s final tick of approval should help make the process as seamless and painless as possible.