Air New Zealand (ANZ) has added its voice to the opposition to the proposed joint venture between Australia's Virgin Blue and US carrier Delta Air Lines.
The Star Alliance member says it plans to lodge its complaint to regulators shortly, claiming that the tie-up will be "anti-competitive" and that the carriers could achieve most of the benefits they had spelt out through other arrangements like code-sharing agreements.
Its opposition comes a week after Singapore-based low-cost carrier Tiger Airways, which has an Australian subsidiary, also said that it opposes the joint venture and will bring it up to both Australian and US regulators.
Virgin and Delta said two weeks ago that they initially planned to place each other's codes on domestic flights, and later co-ordinate schedules, capacity, routes, and pricing and to share revenue on their trans-Pacific routes.
They add that without the tie-up, it would be difficult for them to compete effectively on the routes against Qantas Airways and United Airlines for a permanent place in this market.
The combined Delta-Virgin share of the trans-Pacific routes would be only 29% on the nonstop Pacific if approved by regulators. This is above United Airlines' 21% but below the 50% that Qantas Airways holds.
However, ANZ's move comes after the Australian Competition and Consumer Commission (ACCC) rejected its proposed tie-up with Air Canada as anti-competitive in January. The airlines had planned to jointly promote and sell Air Canada's Sydney-Vancouver service and ANZ's flights between Auckland and Vancouver.
"The ACCC's analysis in that instance, if consistently applied to the Virgin-Delta proposal, indicates that this new application is unlikely to succeed," John Blair, ANZ's general counsel, said in the statement. "We would certainly hope there will be consistency applied."
He added that Delta and Virgin had separately entered the trans-Pacific market and trumpeted lower fares. However, they were now complaining about the ability of their competitors to force them out of the market if they 'are not allowed to collude on prices and capacity".
Qantas and United Airlines have not said if they will oppose the deal. Singapore Airlines, which owns 49% of Tiger, has unsuccessfully tried for years to launch trans-Pacific flights from Australia.
Source: Air Transport Intelligence news