TD Breaking News – Virgin Blue/Delta alliance denied

No deal for Virgin Blue and Delta Air Lines alliance, for now.

The US Department of Transportation has “tentatively” turned down the proposed anti-trust immunity between Virgin Blue Group and Delta Air Lines on joint services between Australia and the United States.

The government department said that the planned alliance had not demonstrated that it would “produce sufficient public benefits to justify a grant of antitrust immunity.”

In reaching its tentative decision, the DoT said that both Virgin and Delta were relatively new to the Australia-US market, had not shown developed plans to operate as commercial partners and had co-operation to only “a handful of routes”, which limited the alliances public benefits.

It also said the tie-up had failed to provide what positive effects it would offer to the consumer, “such as lower fares or increased capacity.”

Virgin and Delta have two weeks to provide the DoT with reasons as to why the preliminary decision should not be made final, with an outcome now due by the end of this month or early October.

More information as in today’s Travel Daily.

Update:

The U.S. Department of Transportation (DOT) today issued a preliminary denial of Virgin Blue and Delta Air Lines’ application for antitrust immunity in relation to their proposed joint venture on the Trans Pacific Route.

Both airlines will be working with DOT over the next 14 day period to respond to the concerns raised.

Virgin Blue strongly believes the proposed alliance with Delta will be good for consumers.