24 May 2010

Air NZ - Virgin Blue alliance benefits listed

12:38 pm on 24 May 2010

Air New Zealand and Virgin Blue say the benefits of a Trans-Tasman alliance will outweigh any detrimental effects from the removal of direct competition across the Tasman.

Regulators in Australia and New Zealand are expected to take six months to consider their plan, which if approved, will see the carriers collaborating on routes, and selling seats on each other's flights.

A copy of the application to the Australian Competition and Consumer Commission has been posted on its website, although sections referring to the cost savings created through the proposed alliance, are blanked out.

The airlines say the alliance will increase passenger numbers, improve flight scheduling, and improve competition by enabling the airlines to better compete with the Qantas-Jetstar Group.

Virgin Blue says it's constrained in its ability to attract high yield customers because of it's limited frequency across the Tasman.

Air New Zealand says a gap in the market restricts its ability to attract Australian-based passengers and access destinations within Australia.