Australian low-fare carrier Virgin Blue wants regulators on both sides of the Tasman to protect it from what it calls the "anti-competitive effect" of the proposed Qantas-Air New Zealand (ANZ) tie-up.

Qantas announced plans to acquire a 22.5% shareholding in ANZ last November, but the deal is yet to get full approval from both countries. Detailed Virgin Blue submissions to both governments claim its path into the New Zealand domestic and trans-Tasman markets is now littered with barriers to entry in the form of airport access, monopolies on ground handling, and the ease with which ANZ and Qantas could use their own low-cost carriers to suppress Virgin Blue's growth.

Virgin Blue says ANZ and Qantas, through existing arrangements with airports, control key capacity at these and other airports. "Air New Zealand is the monopoly supplier of many ground support and handling services in New Zealand," it adds. The airline also warns of "the threat of strategic capacity and pricing conduct by Air New Zealand and Qantas, particularly through their low-cost operations."

Virgin Blue is calling for ANZ to be required to divest its low-cost arm Freedom Air and for restrictions to be placed on ANZ and Qantas establishing another low-fare airline. It also wants restraints on Qantas using its Australian Airlines arm, in addition to Impulse and Jet Connect aircraft, on trans-Tasman, New Zealand and Pacific routes for three years.

The airline also wants capacity constraints removed, including those on gates and check-in facilities, at gateway ports of Auckland, Christchurch and Sydney.

Virgin Blue says it is committed to beginning operations on the routes, with or without the proposed alliance, but warns that the "timing and scale will depend on the barriers to entry".

ANZ will suspended direct Sydney-Los Angeles flights on 27 April, easing regulatory concerns over the proposed link with Qantas. Also suspended are two weekly services between Auckland and Cairns.

Source: Flight International