Virgin Australia Holdings Limited
(ASX:VAH) and AIR NZ
(ASX:AIZ) are expected to be permitted to continue their trans-Tasman alliance, after the ACCC announced it plans to grant conditional approval for the deal lasting three years.
The competition watchdog says its draft decision comes after deeming the alliance to be of benefit to the public.
The ACCC says the alliance is unlikely to reduce competition on most of the trans-Tasman routes.
But the regulator says it is concerned the tie-up may impact competition on some routes including Christchurch to Melbourne and Wellington to Brisbane.
As a result, the ACCC says Virgin and Air New Zealand will be required to maintain capacity on these routes.
Virgin Australia delivered a net profit of $23 million for the first half of fiscal 2013.
