Malaysia Airlines' codeshare link with Virgin Atlantic Airways on the Kangaroo Route hit unexpected turbulance when the Australian government declined to approve it. However, at presstime Virgin officials were hopeful of a positive outcome by mid-May, allowing the codesharing to start by early June.

Canberra's refusal to clear the way for joint flights between Kuala Lumpur and Australia apparently was because it wants the UK carrier to operate its own services into Sydney. Government sources in Canberra say Virgin will be asked to consider taking up the rights it holds to fly to Australia. It is not clear whether this is linked to concern over the impact of cooperation between British Airways and Qantas on the Kangaroo route.

Virgin has already been granted two weekly slots at Sydney Airport and its chairman, Richard Branson, has long wanted to operate to Australia. However, economic realities and a desire for higher frequencies have tempered his ambition. Canberra's pressure is unlikely to convince Virgin to change its mind; the airline considers the 10-year codeshare deal with Malaysia is an economic way to test the Australian market without over-committing resources. Virgin says it still wants to fly to Australia in its own right, alongside the MAS codeshare, but not yet.

MAS had intended to launch the joint services in April. Bashir Ahmad, Malaysia Airlines' commercial director, says the Malaysian and British governments have no objection to the codesharing services, but Virgin has been advised to wait for Australian approval.

Source: Airline Business