Virgin Australia was in for a surprise on Wednesday when Air New Zealand had informed that it would end its seven-year Trans-Tasman alliance with the airline.
Under the current alliance, the airlines had coordinated their flights, schedules, prices and had also offered reciprocal benefits for frequent fliers. Virgin Australia also had excited the intra-New Zealand market where it had previously operated under the Pacific Blue-brand.
Here’s an excerpt from NZ Herald (access the piece here):
In the latest move in a worsening relationship, the New Zealand carrier announced it would not reapply to continue an alliance from October.
This prompted Virgin to warn that it too may expand across the Tasman and possibly use its budget arm, Tigerair, in this country.
The announcement surprised Virgin Australia whose chief executive and managing director John Borghetti said his airline has had a strong presence in the New Zealand and transtasman market since 2004 and would continue to enhance its offering to suit both the business and leisure markets.
And here from Reuters (access the piece here):
Emirates quit most flights between Australia and New Zealand as part of that renewed alliance, entrenching Qantas and Air New Zealand as the biggest players in the market.
As of May 2017, before the Emirates changes, Virgin Australia had a market share of 14.5 percent versus 33 percent for Air New Zealand and 31.6 percent for Qantas, according to data filed with Australia’s competitor regulator.
Wallace said Air New Zealand would talk to Virgin Australia about offering codesharing or interlining arrangements on domestic flights in Australia ensure passengers retain access to destination options after the end of the alliance in October.
Air New Zealand needs domestic Australian feed as it just cannot fly to every city in the country or offer frequency required between every destination between Australia and New Zealand. The only choices are Qantas or Virgin Australia.
As the Reuters points out, Emirates stopped flying most of its Trans-Tasman flights and Qantas beefed up its services as a result.
Virgin Australia is not part of any alliance but has frequent flier agreements with number of airlines including Etihad and Delta.