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Air NZ and Virgin Oz to end trans-Tasman alliance

April 5, 2018 Headline News No Comments Email Email

Some relationships change suddenly after seven years – and the trans-Tasman alliance between Air New Zealand and Virgin Australia is one of them.

The two airlines will end their trans-Tasman partnership in October this year.

They began the strategic alliance at the end of 2010 to cooperate on services between New Zealand and Australia.  After seven years of partnership, current regulatory approval for the alliance expires at the end of October this year and the airlines confirmed yesterday they will not apply for renewal.

Air New Zealand was once a substantial shareholder in Virgin Australia. It sold off its shareholding in 2016 but the two carriers remained committed to their trans-Tasman alliance.

The Tasman has been described as one of the world’s most competitive routes. The market share of the Air New Zealand-Virgin Australia alliance on the Tasman was recently reported to have increased to 53%. That was after Emirates pulled A380 services from Auckland to Melbourne and Brisbane in favour of direct services to Dubai.

Air New Zealand chief revenue officer Cam Wallace was quoted by the New Zealand Herald at the weekend saying the Tasman was vital to his airline’s business, comprising about 23% of all seats.

Yesterday, Wallace said market dynamics on the Tasman had changed and the time was right for each airline to focus on its own objectives.

“Australia is the largest source of inbound visitors to New Zealand and Air New Zealand has built up a significant presence in this market,” Wallace said.

“This move will enable us to deliver a more consistent customer experience by using our own fleet and delivering an improved schedule, which we’ll provide more details about shortly.

“We remain fully committed to our other alliance relationships and our overall global airline alliance strategy as a critical success factor in other markets.”

Current trans-Tasman alliance arrangements will remain in place until 27 October 2018 and customers travelling before this date will be unaffected. Customers booked with Air New Zealand to travel on a Virgin Australia service (or vice versa) after 28 October 2018 will be contacted by their booking airline.

Air New Zealand alerted its frequent flyers last night to its decision to return to operating independently on the Tasman. It’s note included a link to a page giving info on technicalities like Airports Dollars and Status Points.

The airline said:

Over recent years Air New Zealand has built up a significant presence in Australia which we believe makes this the right time for us to focus on our own strategic objectives. We operate direct to eight Australian cities, and from October we will deliver an improved schedule. We look forward to sharing details of this soon.

We are pleased to be able to serve our customers better and deliver a more consistent customer experience by flying them on our aircraft, with our product offerings and our friendly Kiwi service.

If you wish to travel or are travelling across the Tasman prior to 28 October, there is no change and current alliance conditions and entitlements will apply.

If you already have a booking across the Tasman and your travel is after 28 October, you don’t need to do anything. If you booked direct with Air New Zealand and there are any changes to your flights, we will be in touch in the next few weeks to let you know. If your booking was not made directly with Air New Zealand, then your ticketing agent will be in touch regarding any changes.

If you do have any questions, please note that our Contact Centre is likely to be very busy at this time, so we encourage you to first review our FAQs here.

Written by Peter Needham

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