News
ACCC approves Virgin Australia-HNA Group alliance
June 9th 2017
The Australian Competition and Consumer Commission (ACCC) this week issued a draft approval of the proposed alliance between Virgin Australia and China's HNA Aviation on flights between Australia, mainland China and Hong Kong. Read More »
The draft authorisation is now open for comment and will likely be finalised in July.
As part of the proposed alliance, Virgin and the HNA carriers, Beijing Capital Airlines, Hainan Airlines, Tianjin Airlines and Hong Kong subsidiary Hong Kong Airlines intend to introduce direct services between Australia and Hong Kong and Australia and Mainland China. The airline partners want to codeshare on each other's intercontinental services and their respective domestic networks.
They also will co-operate on route planning, sales, distribution and marketing, frequent flyer programs, lounge access and other commercial partnerships.
As part of the deal, Virgin Australia will launch a five-weekly A330-200 route between Melbourne and Hong Kong on July 5. This will be Virgin’s first route into Greater China. The route is currently served by Cathay Pacific Airways (3x daily) and Qantas Airways (1x daily), with a weekly capacity of 7,674 seats.
The ACCC first wanted to approve the HNA-Virgin Australia tie-up for ten years, but following opposition from Cathay and parent Air China, which said the alliance would limit competition on feeder flights, the regulator granted immunity for five years only. The only party fully objecting the alliance was JumpJet Airlines, a proposed New Zealand start-up.
Virgin Australia is expected to announce another Australia-Hong Kong route and one linking Down Under with Beijing in the near future.
HNA Aviation and China’s Nanshan Group – which owns Qingdao Airlines – became major shareholders in Virgin Australia in 2016.
Virgin Australia Group CEO, John Borghetti, said the alliance would “enable Virgin Australia to accelerate its access to the Chinese travel market and work with HNA in driving inbound visitors to Australia”.
Zhang Kui, co-chairman of Hong Kong Airlines, remarked at the 2017 IATA AGM in Cancun that the alliance with Virgin Australia was “one of the major steps of Hong Kong Airlines’ globalization strategy.”
“Following our launches in Gold Coast, Cairns, Auckland and Vancouver, we strive to expand our network coverage to a wider region and strengthen our overall competitive edge in the Oceania and the North America region,” Zhang said.
