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Publish Date : 05-Sep-2013

For an extension of trans-Tasman alliance the Virgin Australia Holdings Ltd and Air New Zealand Ltd have conditional approval from the consumer supervisory body.

In a statement to the Australian Securities Exchange, the groups said that authorization will start on January 1, 2014, when the current authorization finishes, and last until October 31, 2018.

The Australian Competition and Consumer Commission said that the alliance is expected to result in material public benefits and promote competition on trans-Tasman routes, particularly for business travellers.

ACCC Commissioner Jill Walker said, "The alliance will allow the two airlines to offer enhanced products and services, such as new frequencies and increased access to loyalty program benefits and lounges".

The ACCC added that without the alliance, Virgin Australia's trans-Tasman operations would be more limited than its key competitors, while Air New Zealand would be at a competitive disadvantage to the Qantas-Jetstar/Emirates alliance because of its more limited access to the Australian market.

The supervisory body said the alliance is doubtful to decrease competition on most trans-Tasman routes, but is worried the deal may affect competition on routes between Christchurch-Melbourne, Christchurch-Brisbane, Wellington-Brisbane, Queenstown-Brisbane, Auckland-Gold Coast and Dunedin-Brisbane.

The commission likewise needs airlines to make available key performance data at the end of each scheduling season to assist it measure whether the deal is hurting competition.

Virgin chief executive officer John Borghetti stating that it would let the airline to continue to offer consumers a better choice of flights, improved connections and increased capacity on the Tasman.

He said, "We have also worked together to promote tourism throughout regional Australia and New Zealand".

"We welcome today’s decision by the ACCC as it will enable us to continue to work together for the benefit of consumers, tourism and business in Australia."

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