MELBOURNE -(Dow Jones)- Virgin Australia Ltd. (VBA.AU) Chief Executive John Borghetti said Friday the company has a strong case for its alliance with Singapore Airlines Ltd. (SINGY), which is yet to be approved by Australia's competition watchdog.
"It's not lessening competition, it's increasing competition," Borghetti told a business lunch of the agreement between the two airlines announced in June.
"If we get that approved, over 400 destinations in the world will have a Virgin Australia code," he said. "It's good for tourism because it will enable us jointly to look at routes that we could open."
The Australian Competition and Consumer Commission says on its website it anticipates issuing a draft determination on the alliance in September or October.
Rival airline Qantas Airways Ltd. (QAN.AU) has written to the ACCC not opposing the alliance.
"Given the complex and restrictive regulatory environment under which international airlines are forced to operate and the huge capital investment required to commence and operate services on any international route, Qantas believes that international alliances which demonstrate real public benefits need to be positively encouraged by anti-trust regulators and governments," Brett Johnson, Qantas general counsel, said in July.
Under the alliance, Virgin Australia and Singapore Airlines propose to codeshare on each other's international and domestic flights, offer reciprocal frequent flyer program benefits and lounge access, co-ordinate schedules between Singapore and Australia, and engage in joint sales, marketing and distribution activities.
Borghetti also said the company, as part of its strategy to capitalize on its "Australiana", is seeking to minimize the "off-shoring" of jobs.
"We are going out of our way to bring some of the off-shore work back into Australia," he said, pointing out the company was returning 100 call center jobs in the Philippines and Malaysia to Australia.
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