Virgin Blue, Delta Alliance Plan Nixed

(NewsCore) - The Obama administration Wednesday rejected plans by Virgin Blue and Delta Air Lines to coordinate operations for flights between Australia and the U.S.

The U.S. Transportation Department proposed to deny an application for antitrust immunity that would have allowed a Delta-Virgin Blue alliance to cooperate on pricing, revenue management and marketing on trans-Pacific routes.

The agency said the carriers had not demonstrated that the proposed alliance would produce sufficient public benefits, such as lower fares and increased capacity, to justify an exemption from U.S. antitrust laws.

The Australian government has approved plans for the proposed alliance, which the airlines argued would create a broader and more efficient network with new nonstop and online service.

Delta, the No. 1 U.S. carrier by revenue, said in a statement that it was reviewing the U.S. ruling and would issue an official response in a public-comment period in coming weeks.

A spokeswoman for Virgin Blue said the company would respond to the ruling later Wednesday.

The U.S. ruling would become final after a public-comment period to give the carriers and other interested parties an opportunity to voice objections.

In denying the application, U.S. regulators cited a lack of a previous commercial relationship between Delta and Virgin Blue.

The Virgin Blue Group includes V Australia, Virgin Blue and Pacific Blue Airlines affiliates in both Australia and New Zealand.