Air NZ splits with Virgin

THE pending dissolution of the trans-Tasman alliance between Air NZ and Virgin Australia ( TD breaking news) reflects the changing dynamics of the market, according to Air NZ chief revenue officer Cam Wallace.

Speaking to TD yesterday, Wallace said NZ had continued to evolve its strategy, including boosting capacity to North and South America with a strong focus on Australian passengers.

He said the trigger point for the split was the upcoming process required to reauthorise the alliance, which expires in Oct.

In particular the withdrawal of Emirates services between Australia and Auckland made approval less likely, given that NZ and VA have a combined capacity share of 53% on the Tasman.

Wallace highlighted that his team had a “tremendous relationship” with their Virgin Australia counterparts, hailing the strong personal connections between the businesses.

However the parties will not apply to renew the alliance.

“The time is now right for each airline to focus on its own objectives,” he said.

“Australia is the largest source of inbound visitors to New Zealand and Air NZ has built up a significant presence in this market...this move will enable us to deliver a more consistent customer experience by using our own fleet and delivering an improved schedule, which we’ll provide more details about shortly,” Wallace added.

VA ceo John Borghetti said the change provided opportunities for the company on the Tasman, including operating both the Virgin Australia and Tigerair Australia brands in the market.

Current alliance arrangements remain in place until 27 Oct.