Delta, Virgin Australia Welcome DOT's Proposed Approval of Trans-Pacific Alliance

Alliance will create significant benefits for consumers traveling between U.S., Australia

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May 10, 2011, 02:05 ET

ATLANTA, May 10, 2011 /PRNewswire/ -- Delta Air Lines (NYSE: DAL) and Virgin Australia Airlines (ASX: VBA) today welcomed the U.S. Department of Transportation's proposed grant of antitrust immunity to their alliance, which will allow the airlines to implement their joint venture, expanding their reach between the U.S., Australia and the South Pacific region.

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Antitrust immunity will enable Delta and Virgin Australia Airlines to provide a seamless product to customers and more options for travel between the U.S. and South Pacific. The airlines will collaborate through codesharing, coordinating route and product planning and extending frequent flyer program benefits and lounge access to customers of both carriers.

"We appreciate the DOT's thorough review of our alliance with Virgin Australia and recognition of the important customer benefits," said Glen Hauenstein, Delta's executive vice president of network, revenue management and marketing. "This alliance will bring more effective competition to the region and provide consumers greater choice of destinations, frequencies and schedules."

The alliance will create a comprehensive, fully integrated network able to serve thousands of city-pairs in North America and the South Pacific. Delta alone serves a single point in Australia, Sydney, and Virgin Australia's international airline, V Australia, flies only to Los Angeles. The antitrust immunized alliance will allow the airlines to fully cooperate on network planning and distribution to deliver a more attractive and competitive service for customers. A detailed econometric study conducted by Compass Lexecon estimated annual consumer benefits of up to $54 million would be produced by the joint venture.

The alliance with Delta is a centerpiece of Virgin Australia Airlines' product development and international expansion strategy, led by CEO John Borghetti. Under Borghetti's leadership, Virgin Australia Airlines has developed a market-leading international airline, V Australia, which offers direct flights between Los Angeles and Australia. Virgin Australia also operates an extensive network throughout Australia and the South Pacific. Through its alliance with Delta, V Australia has created a network with the scope and breadth to take on larger rivals serving the U.S. - South Pacific marketplace.

Virgin Australia Airlines CEO John Borghetti said: "We welcome the Department of Transportation's proposed approval of our application for antitrust immunity with Delta, which will enable our airlines to deliver a more attractive and competitive service for travelers in Australia and North America."

"The Delta alliance is a key plank in Virgin Australia's strategy to build an international network of airline partners that offers global coverage. If approved, Delta customers will be able to connect seamlessly to Virgin Australia's extensive network of destinations across Australia, New Zealand and the South Pacific and earn frequent flyer points in the process," Borghetti said.

Antitrust immunity is the latest step in an enhanced alliance between Delta and Virgin Australia Airlines, which began with their first codesharing flights in January 2010. On May 21, the codesharing arrangement will be expanded to add five new destinations in Australia and New Zealand to Delta's network. Delta customers will be able to connect in Sydney on Virgin Australia Airlines flights to Brisbane, Melbourne, Perth, Adelaide and Canberra in Australia, and on Pacific Blue (Virgin Australia's Pacific airline) to Auckland and Christchurch, New Zealand. V Australia customers will be able to connect in Los Angeles to Delta flights to San Francisco, Las Vegas, Atlanta, Detroit, New York-JFK and Orlando, Fla.

The DOT's Show Cause Order proposes to grant antitrust immunity to the alliance and allows for a further period of public comment, after which the DOT will issue a final determination.

Virgin Australia Airlines

Virgin Australia Airlines (ASX: VBA), formerly the Virgin Blue group of airlines, was launched in 2000 as the first sustainable low-fare airline in Australian skies. It has established a global reputation as an innovator and leader in the aviation industry; renowned for the warmth of its people and the quality of the service they provide.

Starting out as a single airline operating a single route with just 200 team members, today the group employs over 7,000 people and includes multi-award winning domestic airline Virgin Australia (formerly Virgin Blue); international long-haul airline V Australia, international subsidiary airline Pacific Blue; and Polynesian Blue, a joint venture airline with the Government of Samoa.

Virgin Australia Airlines is currently in the process of re-launching its domestic and short-haul international product, and both V Australia and Pacific Blue airlines will operate as Virgin Australia by the end of 2011. The group also includes multi-award winning frequent flyer and loyalty program, Velocity, and holiday arm, Blue Holidays.

Virgin Australia operates a fleet of 89 modern Boeing 737, 777 and Embraer E-Jet aircraft flying to 32 Australian and 16 international destinations including the USA, Abu Dhabi, New Zealand, Fiji, Samoa, Tonga, Vanuatu and the Cook Islands.

Virgin Australia has an alliance with the award-winning Etihad Airways, providing guests a one-stop service to Europe, and has recently announced partnerships with Air New Zealand and Skywest Airlines which will see it expand its footprint in the South Pacific and regional Australia.

Delta Air Lines

Delta Air Lines serves more than 160 million customers each year, and was named by Fortune magazine as the most admired airline worldwide in its 2011 World's Most Admired Companies airline industry list. With an industry-leading global network, Delta and the Delta Connection carriers offer service to 346 destinations in 64 countries on six continents. Headquartered in Atlanta, Delta employs 80,000 employees worldwide and operates a mainline fleet of more than 700 aircraft. A founding member of the SkyTeam global alliance, Delta participates in the industry's leading trans-Atlantic joint venture with Air France-KLM and Alitalia. Including its worldwide alliance partners, Delta offers customers more than 13,000 daily flights, with hubs in Amsterdam, Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul, New York-JFK, Paris-Charles de Gaulle, Salt Lake City and Tokyo-Narita. The airline's service includes the SkyMiles frequent flier program, the world's largest airline loyalty program; the award-winning BusinessElite service; and more than 50 Delta Sky Clubs in airports worldwide. Delta is investing more than $2 billion through 2013 in airport facilities and global products, services and technology to enhance the customer experience in the air and on the ground. Customers can check in for flights, print boarding passes, check bags and review flight status at delta.com.