Virgin Australia and Air New Zealand end trans-Tasman alliance

On 4 April 2018, Air New Zealand announced that its strategic alliance with Virgin Australia on flights across the ditch would come to an end after over 7 years of partnership. This agreement allowed both airlines to codeshare on each other’s flights and offer reciprocal lounge access and status benefits to each other’s frequent flyer program members. So what does this mean for Australian and New Zealand frequent flyers?

Well, it’s still early days so the fallout from this decision is not entirely clear, but it’s unlikely to be positive for Velocity Frequent Flyers. The relationship between Virgin Australia and Air New Zealand had been souring over the last few years as Air New Zealand sold off its share in Virgin Australia and called for a change of management of Virgin Australia citing poor financial performance. In addition, status benefits and lounge access for Velocity Frequent Flyers travelling on non-Tasman Air New Zealand flights was revoked in mid-2017.

So what’s are the downsides for passengers sticking with Velocity Frequent Flyers?

  • Trans-Tasman service frequency and capacity will drop substantially – Previously Virgin flyers had access to both Virgin and Air New Zealand services and for some city-pairs, such as Brisbane to Christchurch, this offered more choice than Qantas with both a morning and afternoon option on most days instead of (super early) morning services by Qantas.
  • Loss of easy access to South America – Technically this benefit dried up in mid-2017 when the reciprocal benefit rules changed but it’s worth re-capping here. Without Air New Zealand in the mix and their Auckland to Buenos Aires service, Virgin Australia lacks a partner that flies direct to South America from Australia and New Zealand. Alternative options would be Delta but that means flying via North America which is hardly desirable.
  • No more Air New Zealand lounge hospitality – Whilst it hasn’t been officially announced yet, you can bet that Velocity Frequent Flyers will lose access to the fantastic and newly renovated Air New Zealand lounges in Australian departure ports. Virgin is still sourcing a replacement but it’s unlikely to be as good as the Air New Zealand offerings.

Should I switch my travel to Air New Zealand?

For flyers who seldom travel domestically within Australia and instead regularly fly to New Zealand or further afield, it may actually make sense to consider switching your travel to Air New Zealand and the Star Alliance program with partners such as Singapore Airlines and United Airlines.

But, for most Australia frequent flyers, I still think it makes the most sense to stick with an airline that operates within your home country. For example, Air New Zealand status wouldn’t be recognised on any Australian carriers and so you’d be out of luck for domestic flights. It’s still early days and Virgin are yet to announce how they will be expanding their Tasman services, what lounges flyers will be able to access and how Tigerair might be utilised to keep competition strong – watch this space.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s