The airlines today said they are submitting an application for authorisation to both the Australian Competition and Consumer Commission and New Zealand’s Ministry of Transport to enter into a unilateral transtasman codeshare agreement.
The airlines say it will also create more opportunities for Velocity loyalty members to earn and redeem points across the Tasman and give eligible Velocity members lounge access when flying between Australia and New Zealand.
When the pandemic hit in March 2020 Virgin Australia tumbled into administration and quit flying here. Flights to Queenstown were restored last year but the airline - which had a about 14 per cent of the transtasman market before Covid - has not resumed flying into the main centres.
Virgin Australia chief strategy and transformation officer Alistair Hartley said the codeshare agreement would complement the airline’s direct Queenstown services by expanding its transtasman footprint.
“New Zealand is the most popular overseas destination for Australian travellers, making this a great addition to our international network offering.”
Air New Zealand chief transformation and alliances officer Mike Williams said his airline was looking forward to welcoming Virgin Australia’s customers onboard. Neither airline commented beyond a brief statement on the application.
Before the breakup, Air NZ at one point held a 26 per cent equity stake in Virgin, spending hundreds of millions building that up and answering calls for cash as the Australian airline struggled in its domestic market. As part of a deep joint venture, the airlines jointly managed capacity, booked passengers on each other’s planes and shared revenue. Passengers were channelled on to each other’s domestic network, shared lounges and points schemes.
The new proposal doesn’t go anywhere near that deep but represents a significant thawing of relations by both airlines which have a common rival - Qantas - which is showing willingness to flex its muscles across the Tasman.
Air New Zealand does have a domestic deal with Qantas. Following the breakdown of the Virgin deal in 2018, Air NZ agreed with Qantas on reciprocal domestic connectivity, lounge access and said they would co-operate in areas such as developing sustainable aviation fuel.
Airline deals start at the top and the Virgin bust-up came when Prime Minister elect Christopher Luxon was Air New Zealand chief executive and Virgin Australia was led by John Borghetti. By one account they hadn’t spoken in two years before that announcement by Air NZ that it was bailing out.
Luxon and Borghetti were chalk and cheese.
Borghetti, with a love of tailored Italian suits and fast cars was the polar opposite of Luxon, a non-drinking Christian.
There’s fresh leadership at both airlines, Greg Foran at Air NZ and former Qantas group executive (and short-time A2 boss Jayne Hrdlicka at Virgin, set for an initial public offering next year.
The Australian airline has been under fire from Kiwi passengers holding credits after flights were cancelled during the pandemic but being forced to use them on a limited range of flights - from Queenstown or in Australia.
Grant Bradley has been working at the Herald since 1993. He is the Business Herald’s deputy editor and covers aviation and tourism.
