Australian commission approves Air NZ, Virgin alliance

Australia's competition watchdog has conditionally approved a tie-up between Air New Zealand and Virgin Blue on flights between Australia and New Zealand, New Zealand media reported on Thursday.

The approval by the Australian Competition and Consumer Commission's (ACCC) reverses an earlier draft ruling which rejected the alliance as anti-competitive.

The regulator said it received a substantial amount of information since its initial decision about the possible public benefits of such a move, Radio New Zealand reported.

The watchdog has approved the deal subject to the airlines maintaining a certain level of competition on routes from Wellington and Dunedin to Sydney, Melbourne and Brisbane.

As well as co-ordinating routes, prices and schedules as part of a code share agreement, the airlines will also have reciprocal frequent flyer and lounge access agreements.

Air New Zealand and Virgin Blue have given undertakings to maintain competition the flights if their proposed alliance goes ahead.

Air New Zealand says it is pleased by the decision, which it argued was necessary to compete more effectively against the Australian airline Qantas and its low-cost subsidiary, Jetstar, on the trans-Tasman route.

The New Zealand national carrier said it expects a decision from New Zealand Transport Minister Steven Joyce within the next few days.
(Source:xinhua)