Virgin Australia and Air New Zealand apply for renewal of trans-Tasman alliance, without conditions

Virgin Australia and Air New Zealand have applied to the ACCC for a five year renewal of their trans-Tasman alliance which expires on 31-Dec-2013. The renewal would replace the current arrangement that was approved for three years in Dec-2010.

This time around, however, the world has changed. Virgin Australia and Air NZ have requested that the carriers' need to maintain a base level of capacity on the trans-Tasman as a whole, and grow seasonal capacity on some routes, should be dropped as conditions from the renewed authorisation. The airlines claim they have demonstrated that their alliance is not harmful to consumers and has resulted in competitive responses from other airlines.

Furthermore, Virgin Australia and Air NZ say the capacity conditions may in fact be harmful to consumers by preventing the carriers from efficiently reacting to changes in market conditions.

The possibility of Qantas and Emirates extending their global alliance to the Tasman emphasises the need to renew the Virgin Australia-Air NZ alliance, according to the carriers.