Air NZ, Air China alliance approved

The alliance has been authorised for an initial term of five years and four months. Photo / iStock

A strategic alliance between Air New Zealand and Air China has received government approval.

The two airlines announced an intention to enter the alliance during President Xi's State visit to New Zealand last November.

Transport Minister Simon Bridges said the alliance would make New Zealand a more attractive destination for Chinese travellers,

"This alliance means travellers will be able to access more flights and lower fares between New Zealand and Beijing and Shanghai, ensuring they have access to a greater range of choices," he said.

Bridges signed the authorisation after it received Cabinet approval yesterday, allowing the new service to compete with existing services operated by China Southern, China Eastern and Cathay Pacific.

"In addition to expanding services, the alliance will mean Air China will actively market New Zealand as a visitor destination," Bridges said.

"China is our second largest tourist market behind Australia, with visitor arrivals due to double in the next five years. Tourists from China recently pushed New Zealand's annual visitor numbers over the three million mark.

"As well as that, it's our number one export destination with annual exports reaching $11.3 billion in September 2014."

The alliance has been authorised for an initial term of five years and four months.

During that period, the airlines will need to demonstrate the alliance has delivered benefits to consumers and has not adversely impacted on competition in the New Zealand-China market.