Emirates opposes rivals' deal bid

Qantas' alliance partner, Emirates, wants the competition regulator to reject demands from Virgin Australia and Air New Zealand to loosen conditions on their tie-up on trans-Tasman routes.

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.