V Australia & Delta detail trans-Pacific capacity commitment

V Aus Delta tails.jpgV Australia and Delta have submitted to US Department of Transportation details of their capacity commitment on the trans-Pacific market. The two carriers had previously announced their intention not to cut flights in an effort to quell DOT concerns their pending joint-venture would not be anti-consumer.

Under their commitment, V Australia and Delta would maintain at least a “historic level of Transpacific service” service for two years following JV approval. They define that as seven weekly return flights in the peak season for Delta and six weekly flights in the off-peak season. For V Australia, the historic level equates to 14 weekly return flights during the peak season and 11 weekly flights in the off-peak season.

Importantly, the carriers propose those flights be from any point in the US to any point in Australia. This would pave the way for Delta or, more likely, V Australia in the short-term to operate to a US destination besides Los Angeles and even outside of California, which the carriers flagged in their initial application. As V Australia is restrained with no further announced aircraft deliveries that could open new routes, the market could see V Australia change its route network after JV approval by cutting LAX services in favour of another US point.

Of course, there are caveats. The carriers are at their own discretion to determine the periods (note the plural) of peak season, although they affirm they will maintain a peak schedule for at least six months every year.

That means V Australia will have to operate a minimum of 1260 one-way trans-Pacific flights, and 656 for Delta. Delta proposes it to be permitted 10 round-trip cancellations a year, and V Australia proposes 20 round-trip cancellations for itself.

Finally, the carriers say their agreement “is not intended to apply in the case of external events beyond the Parties’ control that materially affect the demand for or cost of providing transpacific air service”. That includes WTI oil not exceeding US$120/barrel (at present it’s $10 shy of that threshold); economic crisis causing the US Dow Jones Industrial Average to drop below 9,000 points or the Australian stock market to dip below 4,000; AUD:USD exchange rate dropping below 1:0.80; or a “terrorist attack, natural disaster, pandemic illness or other significant external event”



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3 Responses to V Australia & Delta detail trans-Pacific capacity commitment

  1. Daniel Piper June 19, 2011 at 9:26 am #

    Will,
    My V-Australia flight was delayed in Brisbane to LA, thus missing my connection to Atlanta.VA airlines is not taking responsibilty for the second ticket I had to purchase from Delta to Atlanta. Who is responsible,the travel agent I trusted and payed for the original tickets, Delta,who recieved 3 payments for 2 seats, the 2 I payed for and one from the other person who got my original seat to Atlanta. Or VA, because of the flight delay,caused the problem.Is this what they call a JV. Sounds more a scam or a way to force people to get flight insurance, which the airlines recieve a share of?Good Luck, Dan

  2. Will Horton June 19, 2011 at 5:58 pm #

    Hi Daniel,

    Sorry to hear about your flight misconnection. Although Delta and V do codeshare, unfortunately you need all of your flights on one ticket (PNR) otherwise when you miss your connection it is no different than going from a Qantas to Virgin flight! Although some airlines are lenient with misconnections, that was not the case with you. I’d suggest checking with your travel agent.

    Besides the delay, how was the VA flight?

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