The ACCC has issued a draft determination for Virgin Australia, which will allow them to sell and market Air New Zealand services.
The proposed draft will authorise Virgin Australia and Air New Zealand to make unilateral codesharing arrangements on trans-Tasman routes.
Virgin Australia and Air New Zealand have sought authorisation for Virgin Australia to place its airline code on trans-Tasman routes operated by Air New Zealand. In the past, these have originated and been sold in Australia.
The codeshare rights have been provided on the condition that Air New Zealand specifies the fares at which Virgin Australia may market and resupply those itineraries.
Free Sale codeshare agreements now allow the marketing carrier (Virgin Australia) to sell an unlimited number of seats on the operating carrier services (Air New Zealand).
"This proposed codesharing arrangement has the potential to increase ticketing choices for Australians travelling to New Zealand and provide Velocity frequent flyer program benefits and international lounge access for eligible Virgin Australia customers," said Mick Keogh, deputy chair of ACCC.
Virgin Australia and Air New Zealand will also be able to jointly provide businesses with discounts and other marketing offers for VA code trans-Tasman services.
Currently, Virgin Australia operates its services on routes between Queenstown and Melbourne and Sydney and Brisbane.
The proposed arrangements do not apply to those routes or any other routes where Virgin Australia commences operating its services in competition with Air New Zealand.
"We consider it unlikely that any significant increase in passenger demand for trans-Tasman services due to this codesharing arrangement would raise airfares," Keogh said.
"Based on current information, we also consider that the codesharing arrangements do not materially reduce Virgin Australia's incentive to operate its services on other trans-Tasman routes."
The ACCC has also granted interim authorisation for Virgin Australia and Air New Zealand to commence commercial planning for marketing and selling fares for VA-coded trans-Tasman services.
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