New Zealand yesterday ap­-­proved an alliance between Air New Zealand and Virgin Blue on trans-Tasman routes, the final green light needed for the plan after Australia gave it the go-ahead last week.

Transport Minister Steven Joyce said the tie-up would help ensure fares between New Zealand and Australia remained competitive.

“More sustainable competition, cost savings and the commitment both airlines have made to maintain trans-Tasman passenger numbers will be major benefits of the alliance,” Joyce said in a statement.

He said approval had been granted for three years, after which the government would assess whether the airlines had been acting competitively before deciding whether to renew permission.

The Australian Competition and Consumer Commission last week gave a similar authorisation.

Air New Zealand chief executive officer Rob Fyfe welcomed the move, saying it would deliver greater value to customers.

Virgin Blue chief executive officer John Borghetti said the alliance aimed to bring “better flight schedules, increased flight frequency and great value for money fares”.

Sign up to our free newsletters

Get the best updates straight to your inbox:
Please select at least one mailing list.

You can unsubscribe at any time by clicking the link in the footer of our emails. We use Mailchimp as our marketing platform. By subscribing, you acknowledge that your information will be transferred to Mailchimp for processing.