Virgin Australia (VA) and Air New Zealand (NZ) are a step closer to re-establishing formal ties after the Australian Competition and Consumer Commission (ACCC) said it would tentatively authorise VA and NZ’s unilateral code-sharing arrangements.
In a move that would give Virgin customers easy access to New Zealand destinations, the airlines are seeking approval for VA to display its airline code on NZ’s trans-Tasman routes, specifically those departing from and sold in Australia.
However, the authorisation is subject to Air New Zealand setting the fares at which Virgin Australia can market and resell flights.
Under the free sale codeshare agreement, Virgin Australia, as the marketing carrier, can sell unlimited seats on Air New Zealand’s services, provided there is available inventory.
The proposal won’t affect routes where Virgin currently flies its planes – between Queenstown and Melbourne, Sydney and Brisbane – or where VA starts flying in competition with Air New Zealand.
“This proposed code-sharing arrangement has the potential to increase ticketing choices for Australians travelling to New Zealand, and provide Velocity frequent flyer program benefits and international lounge access for eligible Virgin Australia customers,” ACCC Deputy Chair Mick Keogh said.
He also addressed concerns that codesharing could make more people want to fly Air New Zealand, which might push prices up.
“We consider it unlikely that any significant increase in passenger demand for trans-Tasman services due to this code-sharing arrangement would raise airfares,” Mr Keogh remarked.
“On current information, we also consider that the code-sharing arrangements do not materially reduce Virgin Australia’s incentive to operate its own services on other trans-Tasman routes.”
Virgin Australia and Air New Zealand will also be able to offer businesses discounts and promotions for code-shared services.
Additionally, the ACCC has permitted Virgin and Air NZ to start planning how they’ll market and sell tickets for VA-coded trans-Tasman flights.”
“The interim authorisation excludes the direct or indirect marketing, provision of offers and sale of fares to all customers before the ACCC makes its final determination,” Keogh stated.
The ACCC wants feedback on its draft decision by 8 May 2024, before making a final call. More information can be found here.
Virgin Australia currently has non-reciprocal codeshare deals with various airlines for which it can sell tickets for flights operated by those carriers, including Qatar Airways, United Airlines, Singapore Airlines, Hawaiian Airlines, All Nippon Airways and Air Canada.
The partner airlines set the prices for these tickets in Australia.
Last week, VA announced that Velocity loyalty members can now earn Points on all DiDi rideshares in an exclusive Velocity-DiDi tie-in with an extra 1,000 Velocity Points available for a limited time for members who link their accounts.
In March, Virgin Australia reported an interim revenue of AU$2.8 billion in the six-month lead-up to 31 December 2023, reflecting an uptick of $300 million on the same period last year and a strong start to 2024.
