Virgin Blue-Air New Zealand Seeks Alliance in trans-Tasman

In an attempt to compete with Qantas Airways, Air New Zealand (AIZ) and Virgin Blue (VBA) Virgin Blue are looking forward to form a codeshare alliance which will boost up their presence across the Tasman. The proposal is currently waiting for the approval from the regulator. According to Brett Godfrey, the chief executive of Virgin Blue, the AIZ-VBA alliance will allow his side to have a control over 56 percent of the market as far as the trans-Tasman travelers are taken under consideration. He also added that this would leave their close competitor Qantas along with its subsidiary Jetstar with as much as 33 to 35 percent of the market share in the Australia-New Zealand route.

It is to be mentioned that the proposed alliance will allow both Virgin Blue and Air New Zealand to lower their costs as they will be able to utilize their planes and other resources more effectively- something which is going to cut the cost of traveling in that route, Mr. Godfrey added. The agreement will allow the Australia based air travelers to book from the local Australian ports to any of the domestic airports in New Zealand where Air New Zealand is offering its service and vice versa. In addition to this, the travelers will also be able to accumulate loyalty scheme points and will enjoy the reciprocal use of lounges as soon as the alliance is launched. In his statement, the VBA chief executive also included that the alliance would allow the number of Virgin (Pacific Blue) rotations to hit 210.

However, Virgin is planning to put more focus on attracting the high end customers like the business travelers which are usually seen as richer pickings for the airlines than backpackers and other economical travelers. Although they will comprise a significant portion of the target market for Virgin but will no longer be the main concentration for the airlines.