Commerce Commission to reveal airline decision tomorrow

12.15pm

The Commerce Commission releases its long-awaited decision tomorrow on the proposed alliance between Air New Zealand and Qantas.

The airlines need the go-ahead from competition authorities on both sides of the Tasman, and the Australian Competition and Consumer Commission (ACCC) ruled against the plan on September 9.

Air NZ and Qantas have appealed to the Australian Competition Tribunal about the ACCC's decision, although that looks likely to be a lengthy process.

Following its draft negative ruling earlier this year the Commerce Commission held a six-day conference in Wellington to hear additional arguments on the proposal.

The commission has already delayed its final decision which was due initially by the end of September.

While the commission's four-week extension may signal a shift in thinking on its part, Air NZ announced a four-year business strategy earlier this month to cut costs and improve profitability should the alliance not proceed.

Under the proposal, Qantas would take a 22.5 per cent stake in Air NZ for $550 million, and Air NZ would gain control of both airlines' flights to, from and within New Zealand.

Competition on the Tasman has hotted up since the draft determinations were released, with Australian discount carrier Virgin Blue announcing it would launch its Christchurch-based operations in February, and Emirates already flying to New Zealand.

Shares in Air NZ, which holds its annual meeting in Auckland this afternoon, last traded unchanged at 52c.

- NZPA