Virgin Australia may soon start offering tickets for Air New Zealand Trans-Tasman flights

The Australian Competition and Consumer Commission (ACCC) issued a preliminary approval for Virgin Australia and Air New Zealand’s bid for unilateral code-sharing arrangements on trans-Tasman routes.

This codeshare agreement will enable Virgin Australia passengers to access an unlimited number of seats on Air New Zealand, subject to availability.

Both airlines are seeking permission for Virgin Australia to set its airline code on a free sale basis on trans-Tasman routes operated by Air New Zealand.

The authorisation is contingent on Air New Zealand determining the fares at which Virgin Australia may market and resupply these services to customers.

The agreement excludes routes where Virgin Australia operates its own trans-Tasman services or competes with Air New Zealand, such as routes between Queenstown in New Zealand and Melbourne, Sydney, and Brisbane.

“This proposed code sharing arrangement has the potential to enhance ticketing options for Australians traveling to New Zealand, providing Velocity frequent flyer program benefits and international lounge access for eligible Virgin Australia customers,” ACCC Deputy Chair Mick Keogh stated.

Mr. Keogh believes that a potential increase in airfare prices as demand for Air New Zealand flights rises is unlikely.

He also ensures that the code sharing arrangements will not deter Virgin Australia from operating its flights on other trans-Tasman routes.

“Based on current information, we also believe that the code sharing arrangements will not significantly reduce Virgin Australia’s motivation to operate its own services on other trans-Tasman routes,” Mr. Keogh explained.

The ACCC has also extended the interim authorisation to commercial planning, discussions, and other necessary preparatory steps for the marketing and selling of fares for Virgin Australia’s trans-Tasman services.

“The interim authorisation excludes the direct or indirect marketing, provision of offers, and sale of fares to all customers before the ACCC finalizes its decision,” Mr. Keogh added.

This approach aims to prevent confusion among customers and mitigate any potential breaches of Australian Consumer Law in case the code share arrangement does not proceed.

Through the approval of the codeshare agreements, the ACCC acknowledges the potential public benefits, including increased choice and convenience for trans-Tasman travelers, enhanced loyalty program benefits, and international lounge access for Virgin Australia customers.

“After months of collaborative efforts, this is a great achievement for both teams. Exciting new benefits for Velocity Frequent Flyer members flying to New Zealand will be unveiled as our partnership takes effect,” stated Henry Coles, Head of Airline Partnerships at Virgin Australia Group.

Both airlines argue that the proposed conduct will stimulate competition by allowing Virgin Australia to expand its network offerings and prompt a competitive response from other trans-Tasman operators.

However, the ACCC counters that there is currently insufficient information to guarantee these outcomes.

Virgin Australia and Air New Zealand submitted the application for authorisation on November 17, 2023. Additional clarifications on the proposed conduct were added on April 15.

An interim report was published on May 1, seeking feedback on authorising the proposed cooperation between the two airlines. The ACCC awaits responses on the interim authorisation by May 8 before a final decision is reached.

If approved, the ACCC will grant a five-year authorisation period for the airlines.

Virgin Australia currently offers long-haul international flight services through non-reciprocal codeshare arrangements with various airlines, including Qatar Airways, United Airlines, Singapore Airlines, Hawaiian Airlines, All Nippon Airline, and Air Canada, which set ticket prices in Australia.