Air NZ-Virgin alliance gets five-year extension from ACCC

Air NZ-Virgin alliance gets five-year extension, ACCC will review capacity in 2015

Sept. 3 (BusinessDesk) - Air New Zealand and Virgin Australia’s trans-Tasman alliance has been granted a five-year extension by the Australian antitrust regulator, provided they keep capacity on certain routes.

The Australian Competition and Consumer Commission signalled a three-year extension in a draft determination in July, and has decided to grant the five-year authorisation after another round of submissions, it said in a statement to the ASX. Without the tie-up, the regulator said Air NZ would be at a competitive disadvantage to the Qantas-Jetstar/Emirates alliance.

“The ACCC considers it appropriate to grant authorisation for five years, taking into account the airlines’ additional submissions about the need for a five year term to allow for investment certainty and facilitate greater integration of the alliance partners, thereby releasing additional public benefits,” it said.

The alliance is conditional on the airlines maintaining aggregate base capacity on the Christchurch-Melbourne, Christchurch-Brisbane, Wellington-Brisbane, Queenstown-Brisbane, Auckland-Gold Coast and Dunedin-Brisbane routes. The ACCC will review capacity in September 2015.

Shares in Air NZ were unchanged at $1.43 today.

(BusinessDesk)

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