Wellington - Air New Zealand and Qantas announced Wednesday that they have abandoned a bid to cooperate in joint flights over the Tasman Sea, which divides both countries.
Their announcements followed a preliminary ruling by the Australian Competition and Consumer Commission rejecting the proposed code-share arrangement, under which passengers who booked on one airline could find themselves flying on the other.
Air New Zealand said it had little confidence its views would be given any weight when the commission made a definitive ruling on the proposal.
The arrangement also would have to be approved by New Zealand's Ministry of Transport, but Air New Zealand said, "The costs of further delay and uncertainty are now too high in dealing with the business imperatives in the intensely competitive trans-Tasman market."
An airline statement said, however, that Air New Zealand believed the proposed code share was in the best interests of passengers, was the best solution to address surplus capacity over the Tasman and the best option for retaining low fares.
The airlines have said they are currently flying with 6,300 empty seats daily across the Tasman.
Qantas made no comment in a terse statement that simply announced it was withdrawing its application after the negative draft determination by the Australian commission.