9 SEP: The Obama administration has tentatively rejected plans by Virgin Blue and Delta Air Lines to co-ordinate operations on trans-Pacific flights between Australia and the US, the Dow Jones newswire reports this morning.
The US Transportation Department proposed to deny an application for anti-trust immunity that would have allowed the alliance between Delta and Virgin Blue affiliates.
The agency said it has tentatively concluded that the carriers haven’t demonstrated that the proposed alliance would produce sufficient benefits to justify an exemption from antitrust laws.
"Delta and its partners have only recently entered the U.S.-Australia market, have not shown developed plans to operate as commercial partners, and have limited their cooperation to a handful of routes, thereby limiting the public benefits their alliance might produce," the U.S. Transportation Department said in a statement announcing the ruling.
The agency added that the airlines failed to show their alliance would lead to lower air fares, increased capacity or other benefits for consumers.
The decision will become final after a public-comment period to allow the airlines and other interested parties to voice objections.
The airlines already have received government approval from Australia to move forward with the alliance.
