Delta Air Lines has received initial approval for a joint venture with Virgin Australia Airlines, enabling the two carriers to coordinate their operations between the U.S. and South Pacific.
The U.S. Transportation Department's decision would grant antitrust immunity to Delta and Virgin Australia. It reverses an earlier DOT decision.
Delta first applied for the Virgin Australia antitrust immunity in 2009. Last September the DOT proposed to deny approval, saying the two airlines failed to show the alliance would have positive effects for consumers.
The carriers revised their application, pledging to maintain existing flight capacity in the market for two years and saying they would operate with a combined management structure and reservations system to give travelers a more seamless network.
Delta began flying from Los Angeles to Sydney in 2009. Delta and Virgin Australia have had a code-sharing deal, in which both carriers sell seats on each others' flights, since 2010.
After a two-week period of public comment, the DOT will issue a final decision.
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