Emirates opposes rivals' deal bid
Emirates has questioned claims from Virgin that its alliance has lowered fares on routes between Australia and New Zealand, suggesting it is more likely to be a result of competition from itself, Qantas and Jetstar.
Qantas has also urged the regulator to "thoroughly test" its rivals' claims that their alliance has benefited travellers.
Virgin is lobbying the Australian Competition and Consumer Commission to drop conditions on its alliance requiring the two airlines to keep a certain number of flights on trans-Tasman routes.
In seeking a five-year extension to their tie-up, Virgin and Air New Zealand argue the conditions have the "potential to create significant distortions and inefficiencies".
But Emirates has told the ACCC that the same conditions recently imposed on its own trans-Tasman alliance with Qantas should apply to their rivals, which have a combined market share of almost 57 per cent. In contrast, Qantas, Jetstar and Emirates have about 40 per cent of the trans-Tasman market.
"It would create regulatory distortions if the [Virgin-Air New Zealand] alliance was not subject to the same regulatory conditions [as Qantas-Emirates]," Emirates said in a submission to the regulator.
Emirates said Virgin had not shown cheaper fares had arisen from its alliance with Air New Zealand rather than the "competition dynamics on the trans-Tasman".
While they won approval from the Australian regulator three weeks ago, Qantas and Emirates are still awaiting a decision from New Zealand Transport Minister Gerry Brownlee.
The trans-Tasman route has been the most contentious part of the tie-up between Qantas and Emirates, whose main focus is on routes to Europe via Dubai.
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The dispute centres on whether conditions imposed on airline alliances operating trans‑Tasman routes should be loosened. Virgin Australia and Air New Zealand are asking the Australian Competition and Consumer Commission (ACCC) to drop or relax conditions that require them to maintain a certain number of flights. Emirates and Qantas argue the regulator should reject those demands or apply the same conditions to the rivals.
Emirates told the ACCC it opposes loosening the conditions because it says Virgin has not demonstrated that any cheaper fares resulted from the Virgin–Air New Zealand alliance rather than broader competition on the trans‑Tasman. Emirates also argues that applying different rules would create regulatory distortions and that similar conditions should apply to all major alliances.
Virgin Australia and Air New Zealand are lobbying the ACCC to drop conditions that require the two airlines to keep a specified number of flights on trans‑Tasman routes. They are also seeking a five‑year extension to their alliance and say the existing conditions can create distortions and inefficiencies.
Qantas has urged the regulator to thoroughly test the rivals' claims that their alliance has benefited travellers and lowered fares. Emirates also questioned Virgin's claim that its alliance with Air New Zealand produced cheaper fares, suggesting competition from Qantas, Jetstar and Emirates is a likely factor.
According to submissions noted in the article, Virgin Australia and Air New Zealand together have a combined market share of almost 57% on trans‑Tasman routes, while Qantas, Jetstar and Emirates together account for about 40% of the market.
The article says Qantas and Emirates won approval from the Australian regulator three weeks earlier, but they were still awaiting a decision from New Zealand Transport Minister Gerry Brownlee at the time of reporting.
The trans‑Tasman route is contentious because it involves direct competition and capacity rules between major airlines, and regulators have imposed conditions on alliances operating on that route. The article notes the Qantas‑Emirates tie‑up’s main strategic focus is on routes to Europe via Dubai, making the trans‑Tasman element a sensitive regulatory and competitive issue.
If the ACCC relaxes or removes flight‑number conditions, airlines say it could reduce inefficiencies, but rivals warn it might create regulatory distortions. The debate centres on whether alliances have lowered fares or whether fare changes are due to overall competition. Any change in conditions could influence flight frequency, route capacity and potentially fare dynamics for travellers between Australia and New Zealand.
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