The alliance was this week granted conditional authorisation for three years by the Australian Competition and Consumer Commission (ACCC) after months of lengthy submissions and negotiations.

Under the alliance, both airlines will coordinate prices, schedules and capacity on routes between Australia and New Zealand.

In granting authorisation, the ACCC recognised that the alliance would benefit passengers by providing them with more choice on routes and potentially lower fares.

The transaction involved detailed submissions and lengthy negotiations with stakeholders across the Tasman. Following the ACCC's September draft decision to deny authorisation, the airlines satisfied the ACCC that the public benefits associated with the alliance outweighed any anti-competitive detriment, by providing further evidence and proposing novel authorisation conditions.

A number of New Zealand airports who had expressed opposition to the alliance also withdrew their opposition in light of these conditions. This is the first time that the ACCC has approved an airline alliance on the Tasman, following two previous attempts by Qantas and Air New Zealand.

Competition partner Luke Woodward led the transaction, together with lawyers Louise Klamka and

Rebecca Dollisson.

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The Gilbert + Tobin team worked collaboratively with Bell Gully partner Torrin Crowther and senior associate David Blacktop, who represented Virgin Blue and Air New Zealand in relation to the New Zealand competition aspects of the transaction.

The New Zealand Minister of Transport is expected to announce his decision in the coming days.

This decision comes at the same time as the ACCC announcement that it proposes to authorise Virgin

Blue's alliance with Etihad Airways for a period of five years. The ACCC has recognised that the alliance is likely to promote competition, resulting in benefits for Australian consumers through new international services and increased online connections.