Virgin Blue has received an interim approval from the Australian Competition and Consumer Commission (ACCC) to form an alliance with Etihad Airways.
The decision allows Virgin Blue and Etihad to cooperate on joint pricing and scheduling of services across their networks. The alliance will also add capacity between Australia and Abu Dhabi, says the ACCC.
With this approval, Virgin Blue says that its long-haul subsidiary V Australia plans to offer thrice-weekly Sydney-Abu Dhabi services from February 2011 and thrice-weekly Brisbane-Abu Dhabi services from February 2012.
It will operate its Boeing 777-300ERs on the routes, and be the first Australian carrier to serve the Middle East since 1991, says Virgin Blue.
Eventually, Etihad and V Australia aim to jointly offer 27 weekly services between Abu Dhabi and Australia. This includes double-daily services between Abu Dhabi and Sydney, daily Melbourne-Abu Dhabi flights and six frequencies per week between Abu Dhabi and Brisbane.
"The Virgin Blue Group will now be able to deliver an alternative and competitive network to the Middle East, Europe, UK and beyond," says CEO and managing director John Borghetti.
"This is an important milestone as we create a global international network, greater competition on the international landscape and benefit our guests with great value fares, better scheduling and more choice."
Virgin Blue says that the approval will also allow connections on Etihad's network of 65 destinations across North America, Europe, Asia, the Middle East and the Indian subcontinent from 1 October.
In return, Virgin Blue will offer Etihad passengers connections to 45 destinations in Australia, New Zealand and the Pacific Islands, to Asia and Los Angeles.
The ACCC recently denied an application by Virgin Blue and Air New Zealand to form an alliance for trans-Tasman flights, a decision both carriers are appealing. The commission says that unlike that issue, Virgin Blue does not have any competing services with Etihad.