Emirates opposes easing conditions on Virgin-Air New Zealand alliance

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Emirates has called on Australia's competition watchdog to deny a request by Air New Zealand and Virgin Australia to drop capacity conditions placed on their alliance.

Virgin and Air New Zealand made an application in March to the Australia Competition and Consumer Commission (ACCC) seeking a re-authorisation for their trans-Tasman alliance for a further five years from 31 December 2013.

The two carriers are also pushing for the ACCC to drop conditions requiring them to maintain a base level of capacity on certain routes that can only be altered by approval from the regulator.

They argue that the conditions, which were part of its original authorisation in 2010, distorts the operation of the alliance, imposes additional costs on it, and there would be greater public benefit without them.

Rival carrier Emirates, however, argues that as similar conditions were placed on its alliance with Qantas, they should be maintained for the Virgin and Air New Zealand alliance, to ensure that the carriers compete on a level playing ground.

"Emirates believes that it is important for there to be consistency of regulatory analysis and approach based on the underlying competitive dynamics that exist on the trans-Tasman," the airline said in its submission to the ACCC.

It added that it "would not oppose an authorisation granted by the Commission to Virgin and Air New Zealand, if it was subject to the same regulatory conditions imposed on Emirates and Qantas".

Innovata schedules show that Emirates operates 56 weekly services between Australia and New Zealand, all of which continue on to Dubai, while Air New Zealand operates 286 and Virgin 142 weekly services across the Tasman.

In its own submission, Qantas said certain assertions that the carriers made about the benefits of the alliance should be subject to further scrutiny. It also noted that the alliance covers several routes where it has a monopoly, while the Qantas-Emirates alliance has resulted in no trans-Tasman monopoly routes.

The ACCC has not yet laid down a timeline for when it will announce a decision on the matter.