NZ+VA alliance to be extended***

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The ACCC has given tentative approval for the extension to the alliance between Air New Zealand and Virgin Australia for their joint trans-tasman services.

The Australian Competition and Consumer Commission has signalled in a draft ruling that it will approve the tie-up for another three years - two years less than the airlines were seeking.

Further to the shorter approval length the ACCC will seek to impose capacity conditions on eight routes, this will prevent the two airlines from reducing current capacity on these routes including two highlighted by the ACCC Melbourne-Christchurch and Sydney-Dunedin.

The airlines will also have to provide performance data to help the ACCC decide whether their alliance has had an ''adverse effect on competition more generally''.

As expected the airlines will push for the ACCC to extend the approval to the 5 year term they originally sought as well as pushing for the capacity conditions to be dropped.  Despite the tentative approval from the ACCC the alliance is still subject to approval or rejection by the New Zealand Department of Transport, although I expect them to agree with and approve the ACCC decision and conditions.

Read more on the renewal via brisbanetimes.com.au HERE