Business | Aviation
Etihad-Virgin Blue alliance poised to boost revenues
Competition authority approves partnership
- By Yazad Darasha, Business News Editor
- Published: 00:00 December 17, 2010
Dubai: Etihad Airways, the national airline of the UAE, said the Australian Competition and Consumer Commission (ACCC) has released a draft determination proposing to grant authorisation for an alliance between Etihad and Virgin Blue.
An analyst said an alliance would be revenue-positive for both airlines.
A tie-up between Etihad and Virgin Blue will create a global flight network of more than 100 destinations connecting Australia with Europe, the Middle East, Asia and North America.
Etihad chief executive James Hogan said in a statement: "We are … confident that this alliance will promote competition and generate benefits for travellers.
"Partnering with Virgin Blue enables Etihad to offer customers 45 new destinations across Australia, New Zealand and the Pacific Islands, and opens a host of new connections and routings to Australian travellers via Abu Dhabi."
Extra capacity
Saj Ahmad, an aerospace analyst with London's FBE Aerospace, told Gulf News that the Etihad-Virgin Blue tie-up will bring "far more benefits than it will negative elements as opined by critics of the deal".
He said: "The political ramifications alone in bringing the UAE and Australian capitals together will derive much-needed commerce benefits. [And] customers will have more, not less, choice about travelling into/through Australia as well as connectivity through Abu Dhabi to fly on to Europe and beyond."
Added competition has the benefit of driving more competitive changes to fares as well as being able to drive up revenues on the back of increased capacity and frequencies between the UAE and Australia, he said.
Direct flights
"More choice is essentially what this tie-up brings and there is a very big chance that Qatar Airways and Emirates will also have to make moves to secure extra capacity into one of the most lucrative markets in the world, particularly as Qantas struggles to revamp its business," Ahmad said.
"Qantas cannot afford to sit on the sidelines for very long on its own as it has no Middle East presence at all and will have to do something within the next year unless it wants to suffer financially."
From February 2011, Virgin Blue's international arm, V Australia, will launch direct services to Abu Dhabi.
This will mean Etihad and V Australia will operate a total of 27 weekly services between Abu Dhabi and Australia.
These services include double-daily flights between Abu Dhabi and Sydney, daily between Abu Dhabi and Melbourne, and six frequencies per week between Abu Dhabi and Brisbane.
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