New Zealand gives approval to Emirates-Qantas tie up

Transport Minister Gerry Brownlee said New Zealand will allow the two airlines to cooperate on passenger and cargo transport operations and related services for the next five years. The agreement allows Emirates to offer Queenstown and Wellington as destinations and provides better access to the Emirates international network in Europe, the Middle East and Africa. Air New Zealand has a rival alliance with Virgin Australia between New Zealand and Australia. Virgin Australia then shares with its investor Etihad between Australia and Abu Dhabi.

The alliance, announced in September last year, saw Qantas move its hub for European services to Dubai from 31 March and codeshare on a number of Emirates' services between Australia, Europe and Asia. Similarly, Emirates will codeshare on a number of Qantas's domestic services.

"Competition between strong home carriers is important for the Australasian aviation market and this alliance will ensure competition is retained, while opening the door to additional benefits for New Zealand," Brownlee said. "Exporters and travellers will benefit from strengthened connections with Emirates' international network, including 30 points in Europe, as well as the growing Middle East region and Africa."

More sustainable competition and cost savings should allow low fares to be maintained, he said.

The alliance was approved by the Australian Competition and Consumer Commission in March. That approval stated the airlines can't reduce their capacity below current levels.

New Zealand media suggests the country's tourism and exports sector generally supports the tie-up, but Air New Zealand is opposed to the deal.