Air NZ-Virgin Airline alliance sets new course

Air New Zealand and Virgin Australia Airline have formed a new alliance. Photo / Janna Dixon

Air New Zealand and Virgin Australia Airline's new transtasman alliance will boost capacity this year to Wellington but cut flights to and from Christchurch in the wake of February's earthquake.

The carriers yesterday released plans for a joint transtasman network approved last year by authorities on both sides of the Ditch.

The network will be effective from November with tickets on sale from July, when the code-share starts.

Air New Zealand group general manager for Australasia Bruce Parton said since getting approval in December dedicated teams from both airlines had been working together to optimise the network.

"The changes better match capacity to demand and in many instances this means a greater range of flight times ... as well as better connections to domestic Australia and domestic New Zealand flights," Parton said.

"In addition, as indicated last year, we are actively looking at a couple of potential new transtasman routes which we will likely make a decision on before the end of the year."

Total transtasman capacity into and out of Wellington would increase by 3.5 per cent, while Auckland remained unchanged.

Air New Zealand would operate about 70 per cent of the capacity and Virgin's Pacific Blue airline would account for 30 per cent, which was similar to relative market shares before the alliance.

Capacity changes on some routes to match demand and market conditions included a 16 per cent rise in Air New Zealand Auckland to Adelaide services and a cut of about 14 per cent in transtasman flights in and out of Christchurch to match a reduction in demand as a result of earthquakes, the airlines said.

Virgin Australia group executive for commercial Liz Savage said that with plans for the joint network in place the focus was on the product launch in early July.

"Virgin Australia and Air New Zealand are also committed to growing the market, with plans to grow capacity further from March next year for the northern summer schedule.

"Regional areas in Australia and New Zealand will also see significant benefits from the alliance, as the two airlines will offer code-share flights on each other's domestic services as part of connecting Tasman journeys."

Transport Minister Steven Joyce said last year more sustainable competition, cost savings and the commitment by the airlines to maintain transtasman passenger numbers would be major benefits of the alliance.

Air New Zealand said pricing would be available when tickets went on sale from July.