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Joyce approves Air NZ-Virgin Blue trans-Tasman alliance

Tuesday 21st December 2010

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Transport Minister Steven Joyce has approved an air alliance between Air New Zealand and the Virgin Blue group to operate integrated services on trans-Tasman routes.

The approval from this country, in addition to the recent authorisation from the Australian Competition and Consumer Commission, means Air New Zealand and Virgin Blue will be able to work together on the services and fares they offer on trans-Tasman services.

"More sustainable competition, cost savings and the commitment both airlines have made to maintain trans-Tasman passenger numbers will be major benefits of the alliance," Joyce said today.

"Travellers will benefit from a wider range of travel options and improved range of departure times, and the continuation of competitive fares."

Air New Zealand and Virgin Blue, which operated as Pacific Blue in Australasia, had agreed minimum seat numbers that they would operate across the Tasman, while increasing capacity on some routes.

The alliance authorisation period of three years would place a strong incentive on the two airlines to operate in a competitive manner, Joyce said.

"How Air New Zealand and Virgin Blue implement the alliance, as well as the state of the market, will be taken into account in deciding whether further authorisation is given."

Both airlines would report to the Ministry of Transport on compliance provisions twice a year.

The Minister of Transport retained the ability to revoke authorisation should the airlines fail to comply with terms of the alliance agreement.



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