Regulators may nix Virgin-Delta transatlantic JV

Australia's domestic carriers Virgin Blue and Delta Air Lines are planning a joint venture across the Pacific that would give big boy Qantas a run for its money, but which at the same time may not be an immediate threat to cheap airfares on the routes.

The move comes at a time when consumers are enjoying the cheapest trans-Pacific airfares at the cost of the airlines who are struggling to deal with the double whammy of plunging premium traffic and unsustainably low fares.

The companies said Thursday that they were filing for anti-trust immunity with the US Department of Transportation and the Australian Competition & Consumer Commission.

Also in the works are measures like implementation of codesharing, frequent flyer program reciprocity and lounge exchange privileges ahead of the joint venture, they said.

The airlines are expected to claim that the joint venture would help expanding operations in the US, Australia, and the South Pacific and make for effective competition against incumbents Qantas and United Airlines.

Virgin Blue started operations earlier this year and services about 12 per cent of the non-stop capacity on the Australia-US mainland route while Delta which started the service last week has about 8 per cent. United caters to about a quarter of the market and Qantas the rest.