News: ACCC approves Virgin Blue Etihad tie up

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Australian regulators have given Virgin Blue Holdings Ltd (ASX:VBA) the green light for its proposed five-year alliance with Middle East-based airline Etihad.

Virgin announced plans for the tie-up at the end of last year, designed to see both airlines benefit from cooperating on joint pricing and service scheduling across their networks.

Under the alliance Virgin and Etihad will not however share revenue.

The Australian Competition and Consumer Commission says, given that the airlines do not currently compete on any routes, the ACCC considers the alliance is unlikely to result in any anti-competition.

ACCC chairman Graeme Samuel says the regulator considers the alliance is likely to promote competition and result in new international services, particularly between Australia and Abu Dhabi with onward connections to Europe.

Virgin Blue generated a net profit of $21.3 million in the 2010 financial year.