Dunedin Airport says a trans-Tasman tie-up between Pacific Blue and Air New Zealand will be good for its business.
The alliance has been approved by the New Zealand Government and the Australian Competition & Consumer Commission, allowing for co-operation on routes, prices and schedules.
Both carriers have agreed to put on more flights out of Wellington and Dunedin in line with market growth on the trans-Tasman routes.
Dunedin Airport chief executive John McCall says that should remove the temptation for passengers to drive to Christchurch International Airport to take flights.