The ACCC says it is planning to reauthorise Virgin Australia's partnership with Air New Zealand. Source: AAP
VIRGIN Australia's trans-Tasman alliance with Air New Zealand is set to continue after the consumer watchdog said it intended to re-authorise the partnership.
The Australian Competition and Consumer Commission (ACCC) says it is proposing to grant conditional authorisation for the two airlines to continue their partnership for another three years.
It will make a final decision on the partnership after receiving submissions from interested parties.
Virgin and Air New Zealand formed their alliance in 2010, allowing them to coordinate schedules and pricing and offer reciprocal frequent flyer benefits including lounge access.
In a statement on Wednesday, the ACCC said the alliance benefited consumers and generally helped boost competition on trans-Tasman routes.
"Combining the networks of the two airlines allows them to offer enhanced products and services, such as new frequencies and increased access to loyalty program benefits and lounges," ACCC Commissioner Dr Jill Walker said.
"This in turn is likely to promote competition on trans-Tasman routes."
Dr Walker also said two airlines would be at a competitive disadvantage against their rivals, particularly Qantas, which owns Jetstar and has formed a partnership with Dubai-based Emirates, if the alliance was not allowed to continue.
But Dr Walker said the re-authorisation for the partnership was conditional on the two airlines maintaining current capacity on a number of routes, including Christchurch-Melbourne, Wellington-Brisbane and Dunedin-Sydney.
"The ACCC notes that the weighing up of likely public benefit and detriment was finely balanced and it was only with the proposed conditions that the ACCC reached the preliminary view that the alliance is likely to result in a net public benefit," Dr Walker said.
The ACCC's announcement comes just two days after Virgin completed its partial takeover of Australian budget carrier, Tigerair.
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