VIRGIN Australia and Air New Zealand have lodged a 99-page application to the ACCC seeking the reauthorisation of their trans- Tasman Australasian Airline Alliance, stating public benefits will continue to be realised.
According to the airlines, the two year partnership has already delivered “substantial public benefits” and avoided any anti-competitive detriment on the Tasman as a whole, or on any individual route.”
“These public benefits will continue to increase in scope and substance, and it is likely that additional public benefits will become available, if the Alliance is reauthorised,” the carriers said.
VA and Air NZ are seeking reauthorisation for no less than five years, confidentially outlining to the regulator already incurred “substantial costs” in establishing and implementing the Alliance.
Specific costs have not been made available to the public, but for Air NZ cover implementation, reservation system integration (incl connection to VA’s new Sabre reservation system), sales & distribution channels, airports plus additional set-up costs.
Virgin said it too had made a considerable investment in the Alliance with Air New Zealand.
Should the reauthorisation not be forthcoming, VA/NZ confirmed unwinding the partnership would leave little “incentive to cooperate in any significant way”, and that Virgin pax would immediately lose access to frequencies and codeshare choice on the Tasman.
The Applicants said termination of the pact would make it much more difficult for VA to compete with the Qantas-Jetstar Group for corporate and govt accounts.
“If the Qantas alliance with Emirates is also given final approval in relation to the Tasman this situation will become even worse,” VA/NZ forewarned.
Submissions close on 12 Apr, with a final determination slated to be announced in Aug/Sep.
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