VIRGIN AUSTRALIA & AIR NZ: Applying for trans-Tasman codeshare partnership

Virgin Australia and Air New Zealand, used to be partners in a former life, and are now seeking to reform that relationship. ET, the NZ Herald and the West Australian are reporting that applications have been made to the Australian Competition and Consumer Commission (ACCC) and New Zealand Ministry of Transport to enter into a trans-Tasman codeshare agreement.

The two airlines have been partners before – in fact they were partners up until October 2018 when Air New Zealand pulled out of the agreement, after a disagreement with former Virgin CEO John Borghetti. Qantas took advantage of the situation by codesharing on Air New Zealand domestic flights in both countries, but not trans-Tasman flights.

It will be interesting to see what effect this new alliance between Air New Zealand and Virgin Australia will have on the domestic arrangements with Qantas.

What it means for customers

A codeshare agreement means that passengers could earn Velocity points and status credits on codeshared flights, as well as redeeming Velocity points on for trans-Tasman flights.

Members of the Virgin Australia Velocity program at Gold, Platinum and Beyond (the invitation only program) levels will have access to Air NZ’s lounges, as Airpoints members will have access to Qantas lounges.

It also fixes a massive hole in Virgin Australia’s schedule, which only currently services the tourist and skiing hotspot of Queenstown. Offering service to destinations like Auckland, Christchurch and Wellington could bring back some business related traffic to Virgin Australia.

2PAXfly Takeout

This is a great move for Virgin Australia, and for that matter Air New Zealand. Air NZ has quite a good direct footprint into Australia, covering most capital cities. So the main advantage will be for Virgin Australia, which only currently flies into Queenstown from Brisbane, Melbourne and Sydney. That might also stregthen their case to the ACCC, since they are adding to their service, rather than sharing existing services. On the surface, much less anti-competitive.

Given the two airlines had a partnership before, it will be hard for the ACCC to find objections.

Next question is how soon will it operate?