AIRLINES: Virgin Australia and Air New Zealand re-partner

While their names have been linked for a few years, this time Virgin Australia and Air New Zealand are entering a more intimate relationship.

Codeshare

Air New Zealand and Virgin Australia have had a new codeshare agreement approved that will allow Virgin customers to book Air New Zealand flights to Auckland, Christchurch and Wellington directly. Virgin Australia does not fly its own aircraft to these New Zealand destinations, although it does run a service to Queenstown.

Earn and burn points

Virgin Australia frequent flyer members will be able to earn and redeem Velocity points on these flights to New Zealand. And there will be access to lounges for those eligible members of the Virgin flyers. But it is a one-way arrangement. Members of New Zealand’s loyalty program Airpoints don’t get access to Virgin lounges.

The regultor

The Australian Competition and Consumer Commission (ACCC) is satisfied that the codeshare will give:

“…more ticketing and price options on trans-Tasman routes … able to jointly offer discounts and a range of marketing options to businesses.”

Mick Keogh, Deputy Chair

Virgin presents this a little differently claiming that:

“The regulators’ endorsement reflects the strong consumer benefits the partnership will unlock, including greater value, choice and loyalty rewards for travellers across the Tasman,”

Alistair Hartley, Virgin Australia Chief Strategy and Transformation Officer

‘Potato’/ ‘Potartoh‘ maybe.

The fact is that this doesn’t affect Virgin Australia’s existing Brisbane, Melbourne and Sydney flights to Queenstown since they are definitely NOT part of the agreement. They will remain competitors on those routes.

2PAXfly Takeout

This is on the face of it potentially anti-competitive. However, with Qantas providing the only other service, and Jetstar being Air New Zealand’s competitor in NZ, I can see some sense in this.

It’s interesting that Air New Zealand gets to determine the prices:

The codeshare rights are provided on the condition that Air New Zealand specifies the fares which Virgin Australia may market and resupply those itineraries.

ACCC Media Release

And it specifically excludes current and planned Virgin services to New Zealand:

‘The code sharing arrangements do not apply to routes where Virgin Australia is currently, or decides to start, operating its own services in competition with Air New Zealand.’

ACCC Media Release

So, it looks like the ACCC is being quite conservative with this codeshare agreement.

As an aside, on my recent experience – I have literally just come back from NZ – you will get a much better deal in terms of price for internal fares from Jetstar rather than Air New Zealand. I know, I surpised myself booking Jetstar fares!