ACCC TIGHTENS REIGNS ON VIRGIN/AIR NEW ZELAND ALLIANCE

Written on the 12 July 2013

ACCC TIGHTENS REIGNS ON VIRGIN/AIR NEW ZELAND ALLIANCE

THE ACCC has added more restrictions to a trading agreement between Virgin Australia (ASX:VAH) and Air New Zealand.

In a draft determination the ACCC flagged its concern that the strategic partnership could monopolise a number of routes between New Zealand and Australia.

To address this concern the ACCC have requested that the airlines maintain capacity on these routes, and provide key performance data so that it can assess if the alliance is effecting competition.

“The ACCC notes that the weighing up of likely public benefit and detriment was finely balanced and it was only with the proposed conditions that the ACCC reached the preliminary view that the alliance is like to result in a net public benefit,” says ACCC commissioner Dr Jill Walker.

According to an official ASX statement from Air New Zealand today (July 10) the air carrier:

“... considers that in the current market structure, capacity conditions are not necessary to maintain strong competition in the Trans-Tasman market and will work with the ACCC to understand its rationale for requiring such conditions.”

In addition, the ACCC has allowed for a three year renewal, as opposed to the five-year renewal requested.

The Virgin Airlines and Air New Zealand Alliance includes code share and revenue share arrangements, plus a reciprocal loyalty scheme and lounge access.

“Combining the networks of the two airlines allows them to offer enhanced products and services, such as new frequencies and increased access to loyalty program benefits and lounges. This in-turn is likely to promote competition on Trans-Tasman routes” says Dr Walker.

The ACCC is expected to make its final determination over the following weeks after public comment submissions on its draft determination.

The final determination will then be subject to approval from the New Zealand Ministry of Transport.


Latest News

2017 BRISBANE TOP COMPANIES REVEALED

WHILE Queensland is regarded as an economy in transition with the winding down of the mining boom, the 2017 top 50...

2017 BRISBANE TOP COMPANIES 1-10

FROM insurance and banking to travel, gambling, retail, property and pizza, these "heavyweights" have ha...

2017 BRISBANE TOP COMPANIES 11-20

RETAIL, property, an airline, cars, real estate, software services, energy, agriculture, veterinary services bathr...

2017 BRISBANE TOP COMPANIES 21-30

JEWELLERS Michael Hill International listed in 2016 with a half-billion dollar market capitalisation and a new CEO...

Related News

FURNITURE DISRUPTOR SET TO SHARE HIS ONE OF A KIND BUSINESS MODEL

IT'S no secret that Australians love homemaking. Their ceaseless quest to create the perfect place to call hom...

WEEDING OUT THE ASX'S BURGEONING CANNABIS TREND: 8 COMPANIES TO WATCH

A NICHE is budding on the ASX in the form of medical cannabis, an industry which has been on the country's rad...

FRESH CLASS ACTION TO REVEAL ANOTHER SIDE OF SLATER AND GORDON DOWNFALL

ACA LAWYERS has issued a formal letter of demand to Andrew Grech (pictured), managing director of Slater and Gordo...

STARSHIPS WERE MEANT TO DELIVER DOMINO'S PIZZA

NICKI Minaj may have been off the mark when she declared 'starships were meant to fly'. However, she m...

BOOK YOUR FUNCTION SPACE HERE

 

 

 

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter