Two strong opponents have recently dropped their criticism at Virgin Blue regulatory approval of a trans-Tasman alliance with Air New Zealand. The group of a capital city’s business leaders, who were initially getting in the way of the deal have dropped their opposition as two airlines have agreed not to cut flights, New Zealand’s biggest airport, Auckland, joined Wellington Airport.
Last month the Australian Competition and Consumer Commission flagged its opposition to the planned aviation tie-up because of concerns that more than 1 million passengers a year might be adversely affected by the removal of competition. The critics have been arguing on the fact that Virgin Blue and Air New Zealand would lose out flights on the six trans-Tasman routes in result of the alliance however; both the airlines hence expressed interests in rather, increasing and maintaining the routes under discussion. The routes include very important connection of flights to Sydney, Wellington, Brisbane and Auckland.
The major concern of the opposition was that there will be fewer and more expensive flights to Wellington in result of this deal. However, Sydney, Melbourne and Canberra airports have urged the Australian competition regulator to overturn its initial rejection. Virgin Blue’ trans-Tasman alliance is part of the airline’s strategy of turning the airline into an up market competitor to Qantas Airways, which is at the moment the ruling airline for cheap flights to Auckland, New Zealand from round the world destinations. The overturn of the situation and the surrender of biggest critics is a great boost to Virgin Blue’s ability to win approval for the deal that is vitally important for the airline’s stronger future.
A prominent group of Wellington businesses that also includes the city’s airport have stated that they also no longer oppose the deal because of the commitment to maintain or increase flights on routes from Wellington to Australia has been done. The hike in tourism to Australia, which is the major connecting point for travelers heading further ahead to New Zealand also holds a significant effect on the mergers and agreements between New Zealand and Australian Airlines. Here it’s important to remember, that a big number of travelers to New Zealand prefer connections and stopover in Australia.