Telephone:   1 813 381 5383

Facsimile:  1 813 464 2773

Email: webjet@webjet.com

607 S. Magnolia Ave, Ste. 2

Tampa, FL 33606

USA

The Honorable Ray LaHood, Secretary

United States Department of Transportation

1200 New Jersey Avenue, SE

Washington, DC  20590

  

October 22, 2010

RE:   Application of Delta Air Lines and the Virgin Blue Group

         For Antitrust Immunity

         Docket DOT‐OST‐2009‐0155

Dear Mr. Secretary:    

Webjet Marketing North America LLC dba Webjet.com is a major Online Travel Agency with approximately 10

million annualized Visitors on our site. We are an affiliate of Australia’s largest online travel Agency webjet

marketing PTY which is a publicly traded entity which has built its number one market position over the last

years in Austral‐Asia. Based on our Australian heritage with Webjet Australia being a major share holder in

Webjet North America our core business values and unique selling proposition to consumers is offering choice

to consumers which engage in predominantly international air fare searches.   Prior to founding Webjet

Marketing, I was the Senior Vice President for Sales and Distribution at V Australia and the Virgin Blue Group,

providing me with a unique perspective on the competitive workings of the U.S.‐Australia market.

Our marketing is predominantly geared toward international travelers. Our Search technology web platform

offers consumers help to sift through millions and millions of international airfares to find the deals that are

right for needs of the international leisure traveler. Considering the US population that has a passport is 68

million according to latest State Department figures, our 10 million visitors per year shows that we are a

significant player in the international travel market and that we pride ourselves in being a key airfare booking

engine in the United States for potential international travelers. Particularly for travel to Australia and New

Zealand we have a very strong background and market position. For example our positioning in natural search

here in the US on Google is very prominent as far as we appear on the first page of natural search for terms like

“cheap flights Qantas”, “cheap flights Virgin Blue” or “cheap flights Delta Australia” which shows how highly

ranked we are on a lot of Australia travel related searches.

This prominent position in natural Google search as well as the overall positioning we have for international air

fare searchers here in the US and last but not least our Australian heritage does in our view qualify us to
comment on the DOT’s decision to question the requested antitrust immunity between Delta Air Lines and V

Australia.

Both airlines believe they are currently at a disadvantage to the dominant airlines, Qantas and United Airlines,

that have been in the U.S.‐Australia market unchallenged for almost a decade.   That is understandable because

Qantas and United both have partner carriers on opposite ends of the Pacific, giving them a leg up in terms of

network and distribution.  

Being Australia travel experts, we have been following the developments in this market very closely. Since these

two airlines have entered, the spirit of the free market forces clearly has been cut loose. For example, as a result

of the substantial new capacity in the market, we had launched a visit Sydney campaign In May 2010 targeting

the leisure traveler that would have not considered travelling to Australia in northern summer and rather travel

to Europe in summer with attractive airfare and a holistic marketing campaign. We were able to bringing

tourism Sydney, V Australia as well as hotel properties in Sydney on board for one campaign. The campaign was

communicated on important online as well as offline channels like TV channels in the greater Los Angeles

market as well as other West coast markets. The campaign was very successful with estimated loads on the

airlines to Sydney having reached their peaks in the travel period targeted and resulted in up to10,000

additional arrivals into Sydney in the marketed period.

To ensure the continuation of benefits to consumers, we believe that V Australia and Delta should be allowed to

partner.   Sustainable competition is in our view not possible in an environment where there are two dominant

players operating by themselves unchallenged. It requires new entrants to  shake up the market and that’s why

we are trying to make a case for the two new entrants to succeed in their venture to establish themselves as

competing forces in that market.

As travel agents and distributer to the airlines we know too well that both airlines, in particular V Australia will

have a hard time to succeed without a U.S. partner and distribution network. While they certainly have made a

successful entry and their loads seem to be going alright, no airline can sustain to be in a market on the long run

without access to the premium and corporate market.

While both airlines have a fantastic business class product and V Australia offers as well a premium economy

product, today’s corporate travelers expect more. In our experience, key decision factors are:

 Frequency in a market

 Frequent flier access

 Frequent Flier Status recognition

 Access to beyond travelling in a seamless fashion

Neither of these two airlines has the ability to offer that on both Australia AND USA at the same time. Qantas

can do that certainly in Australia and having very close ties with American Airlines here in the States can offer

that all.  United Airlines position as the long standing number one US carrier with two flights a day to Australia

from their hubs in Los Angeles and San Francisco with dominant frequent flier programs in these key cities

certainly meets the corporate markets needs in the US extremely well.

In our view Delta and V Australia need to join forces in order to provide close to the same benefits that the other

players do on that market.  

Delta’s relationship with V Australia cannot be compared with Qantas and American Airlines. Qantas enjoys the

full suite of FFP benefits, code share access, seamless transfer opportunities and inclusion in a large part of the

American Airlines corporate selling suite. They can do that because American Airlines does not operate
themselves on the South Pacific and hence aren’t competing on that market. So American seems to be happy to

offer the whole suite of leverages to Qantas.

If Delta and V Australia aren’t granted antitrust immunity we predict that the marketplace as a whole will be less

efficient because these carriers will be competing against each other for the small number of remaining

corporate customers that is NOT LOCKED in by Qantas/American and United Airlines – rather than acting

cooperatively to meaningfully challenge the de facto duopoly.   Individually the carriers are a less attractive

proposition for corporate travelers because we would expect that Delta will not grant V Australia Frequent Flier

benefits like top frequent flier tier Status recognition for Skymiles members and neither will  V Australia allow  

their top business travelers to get status recognition and points accrual unless on V Australia metal.

The inability to effectively compete for corporate and higher yield passengers handicaps the new entrant airlines

and could lead to the reduction of capacity to Australia from the United States which will harm consumers:

 Corporate travelers will have fewer choices travelling to Australia and back

 Tourism in US and Australia will suffer a loss of capacity  

As online travel agents acting predominantly in the leisure market we do believe that supply creates demand. If

the supply of flights to Australia goes backwards consumers will have fewer choices which will drive up fares

which will reduce demand which in turn means we can sell less. We truly hope that our point of view as market

participant on the distribution and marketing side of the industry helps to swing the pendulum towards a

decision to grant the immunity for the two carriers.

Please do feel free to contact me in my office of you have any further question and I’d be happy to try to answer

them to best of or knowledge.

Best regards

Mathias Friess

CEO Webjet Marketing North America LLC