Air New Zealand
and Virgin Blue have announced that they plan to see approval to operate an
airline alliance on the Trans Tasman route.
would forge code sharing agreements on the route and provide reciprocal
Frequent Flyer and Airline Lounge arrangements.
The Full media
release from Virgin Blue can be read below:
Virgin Blue Airlines Group and Air New Zealand
Announce Trans-Tasman Alliance Proposal
BRISBANE and AUCKLAND, 3 May, 2010: Virgin Blue Airlines Group (ASX: VBA) and Air New Zealand Ltd (NZSX:
AIR) have today announced their intention to seek regulatory approval to create
an alliance on the Trans Tasman.
The proposed alliance will allow the airlines to strengthen their
competitive offering on the trans-Tasman route and to collaborate on future
route and product planning, code sharing and frequent flyer program benefits.
Virgin Blue and Air New Zealand have had trans-Tasman teams working on
the alliance proposal for some months and later today will file applications
with the Australian Competition and Consumer Commission and the New Zealand
Ministry of Transport. The regulators are expected to take around six months to
review the applications prior to authorisation.
The airline CEOs; Co-founder and Chief Executive of
the Virgin Blue Airlines Group, Brett Godfrey, and Air New Zealand Chief Executive
Officer, Rob Fyfe; said the alliance would deliver trans-Tasman travellers cheaper airfares,
increased frequency, better connections, loyalty scheme reciprocity and
expanded Lounge access.
Mr Godfrey said the alliance would stimulate a new wave of competition
in Australasian aviation.
“A great alliance
should deliver great value and consistent product and service standards and
that is where we will make new inroads,” he said.
“Virgin Blue is close
to unveiling our ‘Airline of the Future’ concepts which in our 10th year will
reveal the fresh direction of the ‘new blue’ and likewise Air New Zealand has
signalled its future product and design direction.”
“This will mean more seats and more low fares than ever before on the
Tasman,” Mr Godfrey said.
“This market stimulation is likely to allow Air New
Zealand and Virgin Blue to harness the alliance benefits to start new routes or
“We believe we are
well matched and the timing is good and incoming Chief Executive, John
Borghetti, thoroughly supports this strategy,” he added.
The airlines said that while the alliance
is a significant development for both carriers, it will not impact or place
restrictions on any existing partnerships or alliances of either airline
The proposed alliance will connect regional centres in Australia and New
Zealand but only as part of a Tasman journey and does not include domestic-only
travel in either Australia or New Zealand. The agreement is also not a signal
of intention by Air New Zealand or Virgin Blue to take a shareholding in the
“We are two of the world’s most innovative and nimble
airlines and by working closer together we believe we can deliver significant
benefits to customers and shareholders,” Mr Fyfe said.
“Our alliance is about working closely together to
give customers cheaper fares, increased frequency and better connections, while
delivering improved returns,” he said.
“Simple moves like integrating schedules and capacity,
allowing customers to book multi-sector journeys on one code, providing
reciprocal loyalty scheme benefits and reciprocal lounge access for qualifying
customers will be a compelling proposition for leisure and business travellers
on both sides of the Tasman.”
Mr Fyfe said that the number of seats flown on the Tasman by the
alliance carriers would grow more quickly than they would without the alliance.
“By combining our New Zealand customer base with the strong market
presence that Virgin Blue has in Australia, additional flights and new routes
will make sense much more quickly. Also, the ability to offer Air New Zealand
codeshare flights to domestic destinations in Australia, and Virgin Blue
codeshare flights to regional destinations in New Zealand as part of connecting
Tasman journeys will be a great benefit to our frequent flyers and a boost for
tourism in both countries,” Mr Fyfe said.
The proposed agreement will have four key components:
- A broad free-sale code share arrangement covering:
- All Tasman sectors currently operated by either airline
- Domestic Australian sectors as part of a connecting Tasman journey
- Domestic New Zealand sectors as part of a connecting Tasman journey
free-sale code share arrangement involves both airlines selling tickets for
each other’s flights under its own airline code.)
- A revenue allocation agreement under which:
- Revenue generated across all Tasman sectors currently operated by either
airline, or which may be developed under the agreement, will be allocated
between the two carriers, and;
- A joint trans-Tasman Network Planning & Revenue Management Team
representing both airlines will oversee the Tasman operation
- A frequent flyer co-operation agreement that will provide
reciprocal loyalty scheme benefits to members of Air New Zealand’s
Airpoints loyalty programme and Virgin Blue’s Velocity Rewards programme.
- A lounge co-operation agreement that will ensure lounge access to
qualifying guests of either airline.