Virgin Australia's Codeshare Approval Opens Wings with Air New Zealand

In its application submitted in November 2023, Virgin Australia requested approval from the competition regulator to participate in free-sale code sharing on routes it doesn't serve, with the condition that Air New Zealand sets the fares for the seats it offers. Additionally, Virgin Australia intends to allow its loyalty program members to redeem and earn points on these codeshare flights.

It's worth noting that this codeshare arrangement won't extend to flights connecting Queenstown with Brisbane, Sydney, and Melbourne, the only trans-Tasman routes currently operated by Virgin Australia.

While some parties expressed concerns to the ACCC that the codeshare might stimulate demand and potentially lead to higher fares, deputy chair Mick Keogh believes this outcome is improbable.

"We also believe that the proposed code sharing arrangements won't significantly reduce Virgin Australia's motivation to operate its own services on other trans-Tasman routes," Keogh adds.

The ACCC is inviting public feedback on its preliminary decision until 8 May, after which it will make its final determination. In the meantime, interim authorization has been granted, allowing Virgin Australia to commence selling codeshare fares immediately.

Previously, Air New Zealand and Virgin Australia had a comprehensive codeshare agreement covering Tasman routes, but this partnership ended in October 2018. Following the termination, Air New Zealand entered into a codeshare agreement with Qantas, which excluded trans-Tasman routes and focused on their respective domestic networks.

According to data from Cirium schedules, Air New Zealand holds the largest share of seats (41%) on routes between Australia and New Zealand for May, significantly surpassing Virgin Australia's share of seat capacity at 1.4%, placing it seventh in the rankings. Qantas accounts for 33% of seats operated across the Tasman Sea.