Australia presses for approval of Delta-Virgin Blue tie-up

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Washington DC
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The government of Australia is stressing to US regulators that a proposed joint venture between Delta Air Lines and Virgin Blue group carrier V Australia is consistent with principles underlying the open skies agreement between the two countries.

Delta and V Australia unveiled their planned transpacific joint venture in July 2009, and secured Australian approval in December of that year.

But US regulators on 8 September 2010 denied the carriers necessary anti-trust approval to create the joint venture, arguing Delta and V Australia have limited their cooperation on a handful of routes, which limits the number of public benefits the tie-up could produce.

Australian officials explain that through the open skies agreement reached with the USA in 2008, "the Australian government expected its carriers to receive the full benefits and rights available under open skies agreements, including the opportunity to obtain anti-trust immunity", Australian officials explain in comments to the US Department of Transportation (DOT).

The Australian government argues V Australia and Delta operate "without the significant advantages of alliance groupings" of Oneworld partners Qantas and American and Star carriers United, Air New Zealand, Continental, Air Canada, Lufthansa and US Airways. "Approval by competition regulators of the joint venture would see these two independent carriers compete with the established alliances".

As Delta and Virgin Blue prepare to respond in detail to issues raised by DOT, Australia's government "trusts the additional information will be sufficient to address the concerns and looks forward to a positive outcome", on the carriers quest for anti-trust immunity.