Air NZ, Cathay win five-year extension for joint venture
Extension to take partnership to more than two decades
Heralds ‘new era of cooperation’ for Air NZ and Cathay Pacific
Air New Zealand and Cathay Pacific Airways have won a five-year extension to their joint venture, taking the partnership to more than two decades.
The Commerce Commission approved the extension on Tuesday, saying it would "continue to result in substantial public benefits".
Air New Zealand chief executive Greg Foran said the extension was a "significant milestone" for the partnership, which has been in place since 2004.
"This extension is a testament to the strength of our partnership with Cathay Pacific," Foran said.
"It will allow us to continue to provide our customers with a world-class travel experience, with more choice and flexibility."
Cathay Pacific chief executive Augustus Tang said the extension would herald "a new era of cooperation" between the two airlines.
"We are confident that this partnership will continue to drive innovation and growth for both Air New Zealand and Cathay Pacific," Tang said.
The joint venture allows Air New Zealand and Cathay Pacific to coordinate their schedules, pricing, and marketing activities on trans-Pacific routes.
It has been credited with increasing competition on the routes, leading to lower fares and more choice for consumers.
Extension approved despite Commerce Commission concerns
The Commerce Commission did raise some concerns about the extension, saying it could "foreclose competition" on some routes.
However, the commission ultimately concluded that the benefits of the joint venture outweighed the risks.
"The commission considers that the public benefits from the joint venture are likely to exceed the detriments," the commission said in its decision.
Extension welcomed by tourism industry
The extension of the joint venture has been welcomed by the tourism industry.
Tourism Industry Aotearoa chief executive Chris Roberts said the partnership was "vital" for New Zealand's tourism industry.
"This joint venture has been a major driver of growth in tourism between New Zealand and Asia," Roberts said.
"We are pleased to see it extended for another five years."
Air New Zealand and Cathay Pacific are the two largest airlines operating between New Zealand and Asia.
The joint venture has allowed them to offer a wider range of services and more competitive fares to customers.
The extension of the joint venture is a positive sign for the future of air travel between New Zealand and Asia.
