Approval given to trans-Tasman alliance

Virgin BlueThe assurance to run additional flights to and fro Wellington was a very significant step in making the rare and unlikely change of heart by the Australian competition watchdog which finally gave its nod to the trans-Tasman alliance between Air New Zealand and Virgin Blue.

After giving hints in September that it would not allow the suggested deal due to competition concerns, the Australian Competition and Consumer Commission did a 180-degree turn yesterday and approved of the deal on the condition that the airlines would provide extra flights on certain routes.

A similar proposal approval is still pending in New Zealand, wherein the airlines will be allowed to work on wide-ranging collaboration on prices, revenue and schedules which will else be a violation of the competition rules.

The ACCC's approval will be reviewed in 3 years later, and not the five years that had been requested by the airlines.

Earlier, a group of influential Wellington business bodies had been against the deal because it has the potential to harm the capital's interests.

Air New Zealand and Virgin Blue together makes up 60 percent of the flights from Wellington to Australia.