Passengers and businesses will benefit from Australia's major airlines being allowed to co-ordinate flights on key regional routes until at least mid-next year.
Rex, Qantas and Virgin Australia have since March synchronised once-daily flights and split revenues in response to exceptionally low demand during coronavirus lockdowns.
The competition watchdog has agreed to extend the arrangements until June 2021 given the ongoing impact of the pandemic.
"We acknowledge that such co-ordination between airline competitors in this way would normally raise competition concerns," ACCC deputy chairman Mick Keogh said on Thursday.
"However, the extraordinary circumstances mean that co-ordination is in the public interest."
The agreement hinges on airlines capping their fees at February prices, before their fleets were grounded.
This is to stop companies charging exorbitant prices for airfares.
Meanwhile, travel agents have warned international passenger numbers won't recover to pre-pandemic levels until 2024.
They argue the projected return date, which is one year later than previously forecast, highlights the need for tailored support for the travel and tourism sectors.
Tourism Minister Simon Birmingham told an online conference hosted by the Tourism and Transport Forum that work continued on a New Zealand travel bubble and pilot programs to safely bring in international students.
"Home Affairs and the airports have all been working carefully to put in place the necessary safeguards to make sure that Kiwis coming in, and indeed Australians travelling through, would be kept safe and kept isolated from other flights returning from other parts of the world that might pose higher risks," he said.
But he said New Zealand was understandably taking a "higher degree of caution" as a result of the virus situation in Melbourne and Sydney.
On extra government assistance for tourism, Senator Birmingham said: "We'll be having a look, whether it's in this year's budget or in the lead-up to the end of the JobKeeper program about the status of the sector and the economy overall, and what's necessary at those junctures."
Australian Associated Press