Delta and Virgin Blue's New Partnership Takes on United

(MoneyWatch)  Starting Jan. 18, Delta Air Lines and Virgin Blue Airlines will begin a partnership between Delta and V Australia for long-haul flights down under. Flights from Los Angeles, CIncinnati, New York City, Orlando and Salt Lake City can now book flights for travel starting Feb. 15 on Virgin Blue-operated flights.

Delta SkyMiles members will still be able to earn mileage on V Australia. Delta's BusinessElite, Platinum, Gold and Diamond Medallion or Sky Club members also be able to use Virgin Blue lounges and similarly, Virgin Blue Velocity members will be eligible for frequent flier miles for travel on Delta.

Delta began daily nonstop service between Los Angeles and Sydney last July as part of a sweeping paradigm shift for U.S. airlines wanting a more international presence to weather the recession/depression. It's also part of Delta's plan to expand its presence in the Pacific, one of the few places projected to recover economically more quickly. As I wrote about last week, Delta was desperately trying to lure Japan Airlines from American Airlines as part of this new campaign.

The codeshare agreement took a lot of time, with both the U.S. and Australian governments approving the partnership. Part of the reason the Australian Competition and Consumer Commission may have approved the partnership is that Virgin Blue has publicly said its launch of V Australia was badly timed and that it has sustained losses of $35 million this year -- enough of a threat to its financial stability that a partnership with Delta was a necessity to keep in the air.

So, Delta -- trying to compete with United and Qantas codeshares and Virgin Blue, trying to keep solvent -- are both benefiting from their new agreement.