Together again: Air New Zealand-Virgin Australia deal approved

Air New Zealand and Virgin Australia have rekindled a previous relationship across the Tasman.

Virgin Australia and Air New Zealand’s transtasman deal to benefit the Aussie airline’s passengers has been approved.

The airlines say the transtasman “romance is set to be reignited” following long authorisation of a new codeshare agreement by Australian, and now, New Zealand regulators.

The approval of the deal comes after a bitter break up in 2018, ending a deep partnership where at one stage Air NZ had an equity stake in Virgin Australia.

Under the new agreement, Virgin Australia customers will be able to directly book Air New Zealand flights into Auckland, Wellington, and Christchurch, complementing Virgin Australia’s Queenstown services.

Velocity members will also be able to earn and redeem Velocity Points, and eligible members and guests will have access to lounges when flying across the Tasman.

• This is a unilateral codeshare agreement whereby Virgin Australia will market and resell transtasman services operated by Air New Zealand (excluding Queenstown services) under a VA code.
• There are no reciprocal arrangements for Air NZ and its customers.
• Authorisation has been granted for five years.
• Virgin Australia has approximately 11.5 million Velocity members.

Virgin Australia chief strategy and transformation officer Alistair Hartley said the long-awaited partnership would give Virgin Australia’s customers access to a comprehensive network between Australia and New Zealand.

“Australians share our love of New Zealand and its national carrier and we can’t wait to reignite this partnership before the end of the year,” he said.

Air New Zealand chief transformation and alliances officer Mike Williams said the rekindled relationship would make it even easier for more Australians to make the hop across the ditch, with customers enjoying a taste of New Zealand before they’ve even landed.

“We look forward to welcoming Virgin Australia customers onboard, offering them our exceptional Kiwi service, including food, our great selection of New Zealand wines, and our crew’s famous manaaki [care].”

At one point before the relationship soured, Air NZ held a 26% equity stake in Virgin, spending hundreds of millions building that up and answering calls for cash as the Australian airline struggled in its domestic market. As part of a deep joint venture, the airlines jointly managed capacity, booked passengers on each other’s planes and shared revenue. Passengers were channelled on to each other’s domestic network, shared lounges and points schemes.

The new proposal doesn’t go anywhere near that deep but represents a significant thawing of relations between the airlines, at a time when their common rival Qantas is showing willingness to flex its muscles across the Tasman.

Grant Bradley has been working at the Herald since 1993. He is the Business Herald’s deputy editor and covers aviation and tourism.