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Australia's competition regulator has rejected a plan by Air NZ to join forces with Air Canada, saying the deal could hurt Australian consumers.
The Australian Competition and Consumer Commission (ACCC) has blocked the proposed deal between the two airlines on flights from Auckland and Sydney to Canada.
The ACCC says it's concerned the cooperation agreement could reduce competition for flights between Australia and Canada.
"Air New Zealand and Air Canada are two of the four main carriers on the route," ACCC chairman Graeme Samuel said in a statement.
Under the proposed deal, the airlines would jointly promote and sell Air Canada flights between Sydney and Vancouver and Air New Zealand flights between Auckland and Vancouver.
The cooperation agreement would mean both airlines could pool and share revenue related to direct flights.
"On balance, the ACCC considers that the public benefits of the cooperation agreement are not likely to outweigh the public detriments," said Samuel.
Effective competition needed to be maintained on both flight paths so that consumers could benefit from choice and lower air fares, the ACCC said.
- AAP