5 September 2013The Australian Competition and Consumer Commission has announced that it will not oppose the proposed acquisition by Air New Zealand Limited (Air New Zealand) of an additional 6 per cent of Virgin Australia Holdings Pty Ltd (Virgin).
On 3 September 2013, the ACCC issued a final determination granting conditional authorisation until 31 October 2018 for Virgin and Air New Zealand to continue their trans-Tasman alliance.
This alliance removes any potential competition between Air New Zealand and Virgin on trans-Tasman routes until at least that date. The ACCC noted that it was unclear if and when Virgin and Air New Zealand would return to competition in air passenger services markets on the trans-Tasman following that date, and how closely the two airlines would compete if they were to return to competition.
The ACCC noted that, as a consequence of the trans-Tasman alliance, the only direct overlap for air passenger services between Virgin and Air New Zealand was for minor flight routes between New Zealand and the Pacific Islands.
“The ACCC concluded that the proposed acquisition would not be likely to result in a substantial lessening of competition in any market as it would not provide Air New Zealand with the ability to control or materially influence Virgin or significantly affect Air New Zealand’s incentives to compete with Virgin,” ACCC Commissioner Jill Walker said.
