NZ Govt okays Qantas-Air NZ proposal

The nod effectively leaves national interest questions to the New Zealand and Australian competition authorities -- the Commerce Commission and the Australian Competition and Consumer Commission (ACCC).

Qantas is proposing to buy the stake for around $550 million which would see the Government's holding diluted from 82 percent to 64 percent following the issue of new shares.

Qantas and Air NZ have applied to the watchdogs to approve their alliance proposal under national interest clauses of the Commerce Act which can over-ride any lessening of competition.

Under the proposal, Air NZ will control the operations of both airlines to, from, and within New Zealand and the airlines will share the commercial benefits.

While the Government took just 18 working days to make its decision, the Commerce Commission is expected to take until at least mid next year to decide the issue.

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