Air New Zealand (ANZ) is expressing dismay at the Australian Competition and Consumer Commission’s (ACCC) preliminary rejection of its proposed alliance with Qantas Airways, claiming the watchdog group’s ruling is flawed.

Star Alliance carrier ANZ says in a statement that it is “flabbergasted and astounded by the ACCC’s draft determination” rejecting its proposed agreement to codeshare with Oneworld member Qantas on flights between New Zealand and Australia.

Chief financial officer Rob McDonald says a preliminary review of the draft ruling “indicates several inconsistencies”.

“Although we have only had a short amount of time to review the determination’s contents, we have already spotted flaws and we will be raising these with the ACCC before a final determination is made,” says McDonald.

ANZ and Qantas applied early this year to codeshare on flights between their home countries as well as to co-ordinate pricing and scheduling. They have said their proposed tie-up is aimed at removing excess capacity on the so-called trans-Tasman routes.

The ACCC said in its draft ruling today that codesharing would be of limited public benefit and would lead to higher prices and reduced travel options. It will now seek submissions from interested parties before a final determination is made in the coming months.

McDonald says: “If the ACCC sticks with this determination – and let’s remember it has been proven to change its mind – it is potentially forcing Air New Zealand to make capacity and route decisions that will come at a significant cost to consumers. We cannot continue to fly the equivalent of 43 empty Airbus A320 aircraft across the Tasman daily. That’s 6,300 empty seats every day.”

He adds: “The poor performance of both Air New Zealand and Qantas on the Tasman has been well documented. The ACCC is misguided if it thinks airlines will keep pouring tens of millions of dollars into underperforming routes. Airlines are not a charity.”