Singapore Airlines-Air New Zealand partnership opens a new era for Australia-NZ-Singapore dynamics

Air New Zealand (Air NZ)'s new partnership with Singapore Airlines (SIA), announced on 16-Jan-2014, covers flights between their hubs and beyond, significantly deepening a relationship that had soured several years ago.

For Air NZ, the partnership provides important offline access to Southeast Asia, South Asia, Europe and South Africa. Air NZ's only online presence in those markets today is in London Heathrow. SIA will be Air NZ's second major partner after Virgin Australia, where the New Zealand flag carrier holds an equity share of 26% in parent company Virgin Australia Holdings.

Air NZ is now particularly weak in Southeast Asia while it covers North Asia with three much smaller partnerships that it sees as having less strategic importance - Air China, All Nippon Airways and Cathay Pacific. The new deal with SIA essentially closes the door on the potential of the Cathay partnership expanding beyond the (admittedly large) greater China market. For SIA the partnership increases its presence in the South Pacific, where it already has a partnership with Virgin Australia. New Zealand is a small but relatively important market for SIA.