Agreement by Virgin Blue and Air New Zealand to not cut the number of transtasman flights under their proposed alliance seems to have done the trick in winning support from key local opponents.Auckland Airport and Wellington Airport have dropped initial o
Agreement by Virgin Blue and Air New Zealand to not cut the number of transtasman flights under their proposed alliance seems to have done the trick in winning support from key local opponents.
Auckland Airport and Wellington Airport have dropped initial opposition after the airlines agreed to maintain or not reduce flights on six transtasman flight routes – if the alliance went ahead.
The airports were initially concerned the airline’s plans to share aircraft, passengers and revenue on transtasman flight would lead to fewer flights and more expensive fares.
Concerns about the impact on competition were shared by the Australian competition watchdog – stalled the plans last month when it released a draft decision to deny authorisation.
The Australian Competition and Consumer Commission (ACCC) said the two airlines were significant rivals on the route and believed more than one million passengers could be adversely affected if that competition was removed through the alliance.
Air New Zealand and Virgin Blue have since made the guarantee to maintain or increase flights between Sydney and Wellington, Brisbane and Auckland.
Auckland Airport said the concessions had gone “a long way' to allay its concerns it had expressed to the ACCC.
“Subject to the ACCC confirming the strength and effectiveness of the proposed conditions and assurances, Auckland Airport confirms that we have advised the ACCC that our concerns have largely been addressed and we will not be opposing the alliance,” the airport said.
Sydney, Canberra and Melbourne airports are in support of the proposed alliance and have made submissions to the ACCC to reconsider its opposition.
Approval is also required by the New Zealand Ministry of Transport, which is not expected to reveal any decisions on the proposed alliance until December.
Air New Zealand has indicated the alliance could result in up to 80 more flights across the Tasman each week and between $20-$30 million in annual benefits for the airline, with most of that from carrying more passengers, more stable revenue and a more efficient network, rather than cost savings.
It would also help the airline – 75% owned by taxpayers - compete more effectively against major transtasman rival Qantas and its dual-airline strategy with low fare airline-Jetstar.
