Trans-Tasman alliance good for travellers

20:31, Sep 03 2013

Airline travellers have never had it so good, says an aviation analyst, after Australia's competition regulator cleared Air New Zealand to continue its trans-Tasman alliance with Virgin Australia.

The partnership was re-authorised until 2018 by the Australian Competition and Consumer Commission (ACCC) yesterday, on condition the airlines maintained base capacity on regional routes.

The ACCC said that rather than require a minimum capacity growth on the routes, it would review the market demand from September 2015.

The trans-Tasman routes concerned connect Christchurch, Wellington, Dunedin and Queenstown with Brisbane, as well as between Auckland and the Gold Coast and between Christchurch and Melbourne.

Aviation commentator Peter Clark said the omission of a capacity growth factor provided the partnership with "an out", if they wanted to drop capacity.

"But trans-Tasman capacity continues to grow . . . the customer out there has never had such a good deal," Clark said.


Although he agreed with the ACCC that smaller ports would more likely be affected, he said overall the ongoing alliance was a good deal.

"We have so many options now with connections, frequencies, in-flight options and airfares that have never really gone up."

The airlines' initial permission to work together, granted by the Australian Competition and Consumer Commission in 2010, expires in December this year.

Air New Zealand, which is looking to increase its 19.99 per cent share of Virgin Australia, welcomed the alliance extension by the ACCC.

"Authorisation of the alliance will enable the airlines to continue to improve the customer journey across the Tasman," said its chief strategy, networks and alliances officer, Stephen Jones.

"It will also enable the airlines to continue to leverage efficiencies, opportunities and cost savings on Tasman operations."

Wellington, Dunedin and Christchurch stakeholders all submitted to the ACCC their opposition to any unconditional partnership earlier this year.