Delta-Virgin alliance may be rejected
MINNEAPOLIS — Plans by Delta Air Lines Inc. and affiliates of Virgin Blue Group to collaborate on flights between the United States and Australia suffered a setback yesterday, with the US Transportation Department saying it expects to deny their request.
Delta currently flies only between Sydney and Los Angeles. United Airlines and Australian carrier Qantas currently dominate the flight schedule between the two countries.
Delta and Australian budget airline Virgin Blue wanted permission to coordinate fares and schedules, and to share money from the flights. Usually, antitrust laws would block that kind of collaboration, but airlines can get permission in some cases for joint ventures if they can show that consumers will benefit. Australian authorities approved the proposal in December.
However, the Transportation Department said the airlines have not shown that the alliance would provide enough benefits for travelers such as lower fares or increased capacity.
The airlines have two weeks to object.