The Australian Competition and Consumer Commission's (ACCC) has given its final go-ahead for an alliance between Virgin Australia and Singapore Airlines.
The approval allows the two airlines to work together and cooperate on pricing, scheduling, marketing and ticket sales on Australia-Singapore flights and international and domestic connecting services.
The deal is likely to put pressure on competitor Qantas Airways, another carrier seeking to boost its presence in Asian continent. However, increased competition in the sector is likely to transform into cheap flights for passengers.
Virgin Australia and Singapore Airlines have already been provided preliminary approval by the Australian Competition and Consumer Commission in October.
The ACCC said the alliance would "be attractive to both corporate and government passengers."
ACCC Chairman Rod Sims was quoted as saying: "The ACCC considers that the alliance is likely to lead to increased competition for international air passenger services." The commission said the deal is improbable to be notably anti-competitive in any of the pertinent markets.
Virgin Australia CEO John Borghetti welcomed the approval: "This is excellent news for Australian travellers as it provides our guests with access to around 70 additional destinations across Asia, India and Africa, with one of the best airlines in the world.
"The alliance will also be positive for tourism in Australia, as it will enable us to provide Singapore Airlines' customers with seamless travel through to over 30 destinations around Australia and we will jointly promote these destinations", Mr Borghetti said in a press release posted on company's website.
The two carriers are expected to launch reciprocal code share early next year.
"Through reciprocal codeshare, frequent flyer recognition and lounge access with each of our alliance partners, Virgin Australia will be able to offer guests a first-rate seamless travel experience that spans the globe with four of the world's best airlines", Mr Borghetti said.
Virgin Australia is one of Australia's largest airlines in terms of passenger traffic as well as fleet size. It remains one of the first choices for people travelling to and from Australia. The carrier already has regulatory authorization for partnerships with Etihad Airways, Air New Zealand and Delta Air Lines.
On the other hand, Singapore's flag carrier, Singapore Airlines has a considerable presence in Southeast Asia, East Asia and South Asia markets. SIA also operates on the "Kangaroo Route" (flights between Australia and United Kingdom).
SIA's Scoot to start Sydney-Changi flights
There is more good news for travellers with cheap flight tickets on their minds. Singapore Airlines' new long distance budget airline Scoot will start operations by running flights to Sydney in mid-2012. Scoot is planning on offering daily flights to Sydney International from Singapore's Changi airport.
The airline will start with a fleet of four Boeing 777s with a two class configuration and has plans to expand its fleet size to 14 by 2015. Apart from Australia, New Zealand, North Asia, Europe and India have been named as potential destinations by Scoot.
Scoot is sure to appeal to budget flyers as the airline is promising air tickets up to 40 percent lower than full-service carriers.
