Kiwis extend Virgin Air NZ deal

The New Zealand government has extended the trans Tasman alliance between Air New Zealand and Virgin Australia.

The New Zealand government has re-authorised the Trans-Tasman alliance between Virgin Australia Holdings Ltd and Air New Zealand Ltd.

In a statement to the Australian Securities Exchange, Virgin said it welcomed the decision to extend the agreement for another five years.

"It will enable us to continue to bring substantial benefits to consumers, tourism and business across the Tasman," Virgin Australia general counsel Adam Thatcher said.

“We look forward to working together with Air New Zealand to enhance our alliance even further, offering competitive airfares, choice and a seamless travel experience for customers."

The government has not imposed any extra conditions on the arrangement after the Australian Competition and Consumer Commission gave it conditional approval earlier this month.

The ACCC said the alliance was likely to result in material public benefits and promote competition on trans-Tasman routes, particularly for business travellers.

However the regulator imposed conditions requiring the airlines to maintain aggregate base capacity across certain routes where competition may be impacted, and said it would review the airlines' capacity additions in light of actual demand growth over the next two years.

The ACCC also requires airlines to provide key performance data at the end of each scheduling season to help it assess whether the deal is hurting competition.

The current arrangement will expire on October 31, 2018.