Air New Zealand and Virgin Blue promise to keep fares low and retain capacity

Air New Zealand and Virgin Blue promised in a revised submission to the Australian Competition and Consumer Commission (ACCC) they would not increase fares or reduce overall capacity if their proposed trans-Tasman alliance is approved (The Age/BusinessDay.co.nz, 19-Oct-2010). The carriers also stated they are willing to promise to maintain or increase frequencies on the route. Air New Zealand and Virgin plan to increase capacity on six routes by 10% in the next three years and 15% by the fifth year of the alliance. The routes include three from Wellington to Sydney, Melbourne and Brisbane as well as Auckland-Brisbane, Dunedin-Brisbane and Queenstown-Sydney. The carriers also plan to increase frequencies on services from Wellington to Melbourne and Sydney and Auckland to Adelaide, Perth, Sydney and Coolangatta. Wellington International Airport CEO, Steven Fitzgerald, stated the capacity commitments address the airport's key concerns and it is no longer opposed to the alliance. The ACCC is to make a final decision on the deal by 20-Dec-2010. The NZ Ministry of Transport is yet to state its position on the proposed alliance.