Australian competition tribunal upholds Air NZ-Qantas appeal

1.45pm UPDATE


An Australian tribunal today gave the green light to a proposed alliance between Qantas Airways and Air New Zealand Ltd, even though the airlines are no longer able to pursue the tie-up the way they that planned.

The Australian Competition Tribunal today upheld an appeal by the airlines against a decision by the Australian Competition and Consumer Commission (ACCC) that the tie-up would be anti-competitive.

However the alliance was last month rejected by the NZ High Court and the airlines said then they would not appeal that decision and would no longer pursue the alliance.

The plan could not go ahead unless it received approval from both sides of the Tasman.

The alliance would have involved Qantas taking a 22.5 per cent stake in Air NZ, allowing the airlines to co-ordinate pricing and capacity on routes to, from and within New Zealand.

However the airlines have said an approval in Australia could allow them to form a modified alliance.

The tribunal supported all major aspects of the proposal, including plans to code-share, co-ordinate sales, marketing, pricing and scheduling and also approved the plan for Qantas to purchase the 22.5 per cent stake in Air New Zealand.

The tribunal found that all three aspects "will result, or will be likely to result in a benefit to the public and that benefit will outweigh the detriment to the public constituted by the lessening of competition".

"The determination of the ACCC ... is set aside," Tribunal president Alan Goldberg said today.

The tribunal did not publish its reasons for its findings and said these would be released at a later date.

Air NZ said it welcomed the tribunal's decision.

Chief executive Ralph Norris said that he was "pleased the ACT had recognised that the airlines' proposal had merit".

History had shown many of the predictions made by the airlines in December 2002, when the alliance was first proposed, had become reality with ever-intensifying levels of competition in the Australasian aviation market and fares at all time lows, Mr Norris said.

"It is gratifying that Justice Goldberg and his colleagues at the Australian Competition Tribunal have recognised this and have overturned the ACCC's original decision.

"We will review the ACT's decision in detail when the full decision is released and then seek advice on what options are now open to Air New Zealand and Qantas following the ACT decision that will not conflict with the recent New Zealand High Court decision.

"Clearly we will need to have discussions with Qantas to consider the advice we receive."

Until then, Mr Norris said the airline would not be commenting further.

Air NZ shares were up 2c to $1.60 on the sharemarket today.

- NZPA and AAP