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Trans-Tasman air alliance gets green light

Hon Steven Joyce
Minister of Transport

21 December 2010 Draft Media Statement

Trans-Tasman air alliance gets green light

An air alliance between Air New Zealand and the Virgin Blue group to operate integrated services on trans-Tasman routes has been given the green light by Transport Minister Steven Joyce.

New Zealand’s agreement, in addition to the recent authorisation from the Australian Competition and Consumer Commission (ACCC), means Air New Zealand and Virgin Blue will be able to work together on the services and fares they offer on trans-Tasman services.

“More sustainable competition, cost savings and the commitment both airlines have made to maintain trans-Tasman passenger numbers will be major benefits of the alliance,” says Mr Joyce.

“Travellers will benefit from a wider range of travel options and improved range of departure times, and the continuation of competitive fares.”

Air New Zealand and Virgin Blue, which operates as Pacific Blue in Australasia, have agreed minimum seat numbers that they will operate across the Tasman, while increasing capacity on some routes.

Other airlines competing across the Tasman will continue to provide strong competition for the alliance on most routes within and between both Australia and New Zealand.

Mr Joyce says the alliance authorisation period of three years will place a strong incentive on the two airlines to operate in a competitive manner.

“How Air New Zealand and Virgin Blue implement the alliance, as well as the state of the market, will be taken into account in deciding whether further authorisation is given.”

Both airlines will report to the Ministry of Transport on compliance provisions twice a year.

The Minister of Transport also retains the ability to revoke authorisation should the airlines fail to comply with terms of the alliance agreement.

More information including questions and answers, the Ministry of Transport report to the Minister and the alliance agreement are available on the Ministry of Transport website www.transport.govt.nz.

ENDS

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