APPROVED: Virgin Australia and Delta's Pacific joint venture challenging Qantas' US-Australia dominance - Flights | hotels | frequent flyer | business class - Australian Business Traveller
Virgin Australia is gearing up to challenge Qantas for a larger slice of the
lucrative US travel market, following final US government approval overnight for its alliance with US carrier Delta Airlines.
The partnership will see the Virgin Australia and Delta share bookings, routes, lounges and frequent flyer programs, similar to Virgin Australia's current arrangements with Etihad and Air New Zealand and the recently-inked agreement with Singapore Airlines.
Virgin Australia CEO John Borghetti has already spoken of his desire to see Los Angeles become the airline's "second international hub" (alongside Etihad's Abu Dhabi base) and says he plans to have the Virgin Australia-Delta alliance "up and running by the end of the year."
The scheme not only taps Delta’s reach into the North American market but also paves the way for Virgin Australia to open new routes into the US, with a direct service to San Francisco - abandoned earlier this year by Qantas – said to be on the shortlist.
Travellers will also have access to connections through to Canada, Mexico and New Zealand, beyond the primary Australia-USA trunk route.
Both Virgin Australia and Delta have pledged not to reduce flights below their current levels of a joint 22 weekly flights for six months of the year during the high season and 17 flights during the off-peak seasons.
The combined market share of Virgin Australia and Delta of the ANZ-US market is estimated at 21%, well behind both Qantas (at 40%) and the Star Alliance carriers United and Air NZ share (39%).
Impact analysis
The Virgin Australia-Delta alliance will likely mean changes to both flight times and destinations, with the airlines flagging their intent "to fully cooperate on network planning and distribution to deliver a more attractive and competitive service for customers".
In other words: look for the removal of duplicated routes and timetables. It's the clearest sign yet that a Virgin Australia route to San Francisco and other destinations outside Los Angeles is on the cards.
Expect also to see further codeshared flights -- Virgin Australia flights with Delta's DL code, and vice versa. The next slate of codeshares starts on May 21.
Virgin Australia's flight codes -- either the old Virgin Blue DJ code or the old V Australia VA code -- will be added to Delta's flights from LAX to San Francisco, Las Vegas, Detroit, New York JFK and Orlando.
Delta's DL flight codes will appear on Virgin Australia flights from Sydney to Brisbane, Melbourne, Perth, Adelaide, Canberra, Auckland and Christchurch.
A notable omission from the codeshares on this side of the Pacific is flights to New Zealand's capital, Wellington. Virgin Australia and its trans-Tasman partner Air New Zealand promised the Australian and New Zealand governments they would increase flights to Wellington as part of their trans-Tasman joint venture agreement.
For a clue to other possible Virgin Australia codeshares, take a look at Delta's route map from Los Angeles:
Also hidden in the ruling is a clue to the joint Virgin Australia and Delta strategy: flights across the Pacific on large Boeing 777 aircraft, rather than following Strategic Airlines' plans to fly smaller Airbus A330s across the Pacific (the same type that Virgin is using on its Sydney to Perth Coast-to-Coast service).
It would also appear to nix the likelihood of moving one of Delta's larger ex-Northwest Boeing 747-400 planes to the Australian routes.