Air NZ cuts ties on its alliance with Virgin Australia

 

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Air New Zealand gave notice this week that it intends to end its seven-year strategic alliance with Virgin Australia.

The alliance created in 2010 on services between New Zealand and Australia will see regulatory approval for the alliance expires at the end of October 2018. Air New Zealand says the two airlines will not apply for renewal.

Signs that relations between the two airlines had started to fray go back in 2016 when Air New Zealand announced it planned to sell its share holding in Virgin Australia. The move left Virgin with a bloody nose but the move was simply seen as more a formality than something more impacting .The relationship was further hampered late last year when Virgin slashed points and status credits for travellers on flights other than those on Air New Zealand’s trans-Tasman and domestic flights. At the time Air NZ said it was ‘business as usual’.

 

Air New Zealand sites the move as necessary due to the change of market dynamics on the Tasman route with the airline now possessing a strong enough presence in Australia that it did not need to really on the alliance with Virgin Australia. The announcement also comes on the back of Emirates having quit the majority of their flights between Australia and New Zealand, in turn entrenching Qantas and Air New Zealand as the biggest players in the market.

The airlines are working through arrangements for codeshare, scheduling, lounge access and frequent flyer programs.

Current alliance arrangements will remain in place until 27 October 2018.

 

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