Air New Zealand and Virgin Australia announce joint network

Air New Zealand and Virgin Australia announced (16-May-2011) plans for their new-look joint trans-Tasman network, which will form a key part of their new alliance. The alliance will connect Air New Zealand's domestic network of 26 ports to Virgin Australia's domestic network of 31 domestic ports, which the airlines say will offer the largest-ever Australasian route network for trans-Tasman travellers. The new network will be effective for the upcoming Northern Winter 2011 schedule (Nov-2011 to Mar-2012) and tickets will be on sale from Jul-2011 when the code share commences. Under the new network, Air New Zealand will operate 70% of the capacity and Virgin Australia's subsidiary Pacific Blue will operate 30%, which are similar to the relative market share the airlines had prior to the commencement of the alliance. Total capacity is currently above that required by the alliance proposal to the Australian Competition and Consumer Commission and New Zealand Ministry of Transport. The following changes will be made to schedules: [more]

• Brisbane-Wellington: Previously both airlines offered services at similar times four days per week and no afternoon services on some days. The new schedule will see Pacific Blue operate a double daily service of morning and afternoon/evening flights;
• Brisbane-Christchurch: Previously both airlines offered services at similar times four days per week. The new schedule will see the two airlines operate a combined double daily service of morning and afternoon/evening flights;
• Queenstown-Sydney: Previously both airlines offered flights at similar times on Tuesdays and Saturdays only. The new schedule will offer a flight five days a week in peak demand months;
• Wellington-Sydney: Previously both airlines offered services at similar times two days a week and no afternoon services on some days. The new schedule will see Air New Zealand operating double daily services of morning and afternoon/evening flights;

There will also be transferring of capacity on some routes between the two airlines where appropriate, for example:

• Pacific Blue will take up Air New Zealand services from Sydney and Melbourne to Dunedin, operating during the December and January peak. There is also improved connectivity via Christchurch to new double daily Christchurch-Brisbane, Christchurch-Sydney and Christchurch-Melbourne service;
• Air New Zealand will assume all Wellington-Sydney services and Pacific Blue will assume all Brisbane-Wellington services;

Capacity changes will occur on some routes to match demand and market conditions, for example:

• Capacity on Air New Zealand Auckland-Adelaide services will increase by 16%, with a daily service in the peak summer months, and Auckland-Perth services will increase to eight times per week (up 4%) over the summer peak;
• Air New Zealand will take over operation of the Auckland-Cairns route and frequency will be matched to projected demand;
• Total capacity into and out of Wellington is up 3.5%, with Melbourne-Wellington enjoying the largest increase of 10.5% and Brisbane-Wellington up 5%;
• Capacity on Christchurch markets will be reduced by around 14% to match the ongoing reduction in demand as a result of the recent earthquakes;
• Total capacity to and from Auckland remains unchanged, including Air New Zealand's wide body services on Auckland-Sydney, Auckland-Melbourne and Auckland-Brisbane;

The carriers stated the alliance has four main components:

• A broad free-sale code share arrangement covering all Tasman sectors and domestic Australian and New Zealand sectors as part of a connecting journey;
• A revenue share agreement;
• Reciprocal loyalty scheme benefits to members of Air New Zealand's Airpoints loyalty programme and Virgin Australia's Velocity Rewards programme;
• Reciprocal lounge access to qualifying guests of either airline.

Air New Zealand: "Since we received ACCC (Australian Competition and Consumer Commission) and MOT (New Zealand Ministry of Transport) approval in December 2010, we have had dedicated teams from both airlines working closely together to optimise the network. The changes better match capacity to demand and in many instances this means a greater range of flight times by removing 'wingtip flying', as well as better connections to domestic Australia and domestic New Zealand flights. In addition, as indicated last year, we are actively looking at a couple of potential new trans-Tasman routes which we will likely make a decision on before the end of the year." Bruce Parton, Group General Manager Australasia. Source: Air New Zealand, 16-May-2011.

Virgin Australia: "With plans for the joint network now in place, we are focusing on the launch of our comprehensive product offering in early July. We will provide reciprocal Velocity and Airpoints frequent flyer programmes and lounge access in Australia and New Zealand, as well as a coordinated offering of in-flight products and services, so that guests will receive similar first-rate service and benefits, no matter which airline they fly. Virgin Australia and Air New Zealand are also committed to growing the market, with plans to grow capacity further from March next year for the Northern Summer schedule. Regional areas in Australia and New Zealand will also see significant benefits from the alliance, as the two airlines will offer code share flights on each other's domestic services as part of connecting Tasman journeys. This will open up regional destinations in both countries like never before, making it easier for regional residents to get across the Tasman and for tourists to access regional destinations in Australia and New Zealand," Liz Savage, Group Executive Commercial. Source: Virgin Australia, 16-May-2011.