Announcement
GENERAL: AIR: Air NZ annouces Trans-Tasman Alliance Proposal
11:48am
AIR
03/05/2010
GENERAL
REL: 1148 HRS Air New Zealand Limited (NS)
GENERAL: AIR: Air NZ annouces Trans-Tasman Alliance Proposal
Media Release
3 May 2010
Air New Zealand and Virgin Blue Airlines Group Announce
Trans-Tasman Alliance Proposal
AUCKLAND and BRISBANE, 3 May, 2010 - Air New Zealand Ltd (NZSX: AIR) and
Virgin Blue Airlines Group (ASX: VBA) have today announced their intention to
seek regulatory approval to create an alliance on the trans-Tasman.
The proposed alliance will allow the airlines to strengthen their competitive
offering on the trans-Tasman and to collaborate on future route and product
planning, code sharing and frequent flyer programme benefits.
Air New Zealand and Virgin Blue have had trans-Tasman teams working on the
alliance proposal for some months and will file applications with the
Australian Competition and Consumer Commission and the New Zealand Ministry
of Transport. The regulators are expected to take around six months to review
the applications prior to authorisation.
Co-founder and Chief Executive of the Virgin Blue Airlines Group, Brett
Godfrey, and Air New Zealand Chief Executive Officer, Rob Fyfe, said the
alliance would deliver trans-Tasman travellers cheaper airfares, increased
frequency, better connections, loyalty scheme reciprocity and expanded lounge
access.
Mr Godfrey said the alliance would stimulate a new wave of competition in
Australasian aviation.
"A great alliance should deliver great value and consistent product and
service standards and that is where we will make new inroads," he said.
"Virgin Blue is close to unveiling our 'Airline of the Future' concepts which
in our 10th year will reveal the fresh direction of the 'new blue' and
likewise Air New Zealand has signalled its future product and design
direction."
"We believe we are well matched and the timing is good and incoming Chief
Executive, John Borghetti, thoroughly supports this strategy," he added.
The airlines said that while the proposed alliance is a significant
development for both carriers, it will not impact or place restrictions on
any existing partnerships or alliances of either airline.
The proposed alliance will connect regional centres in Australia and New
Zealand but only as part of a Tasman journey and does not include
domestic-only travel in either Australia or New Zealand.
The agreement is not a signal of intention by Air New Zealand or Virgin Blue
to take a shareholding in the other.
Mr Fyfe said if the alliance is approved it will be one of several measures
to improve the airline's competitive position on the trans-Tasman in the face
of the Qantas Group's two-airline move for regional dominance.
"We are two of the world's most innovative and nimble airlines and by working
closer together we believe we can deliver even more significant benefits to
customers and shareholders," he said.
"Simple moves like integrating schedules, allowing customers to book
multi-sector journeys on one code, providing reciprocal loyalty scheme
benefits and reciprocal lounge access for qualifying customers will be a
compelling proposition for leisure and business travellers on both sides of
the Tasman."
As a result of these improved services, it is expected that the alliance will
attract more passengers on Air New Zealand and Virgin Blue services.
"This will mean more seats and more low fares than ever before on the
Tasman," said Mr Godfrey.
"This additional market stimulation is likely to allow Air New Zealand and
Virgin Blue to harness the alliance benefits to start new routes or fly
additional frequencies."
Mr Fyfe said that the number of seats flown on the Tasman by the alliance
carriers would grow more quickly than they would without the alliance.
"By combining our New Zealand customer base with the strong market presence
that Virgin Blue has in Australia, additional flights and new routes will
make sense much more quickly. Also, the ability to offer Air New Zealand
codeshare flights to domestic destinations in Australia, and Virgin Blue
codeshare flights to regional destinations in New Zealand as part of
connecting Tasman journeys will be a great benefit to our frequent flyers and
a boost for tourism in both countries.
"Our alliance is about working closely together to give customers cheaper
fares, increased frequency and better connections, while delivering improved
returns," said Mr Fyfe.
The proposed agreement will have four key components:
1. A broad free-sale code share arrangement covering:
- All Tasman sectors currently operated by either airline
- Domestic Australian sectors as part of a connecting Tasman journey
- Domestic New Zealand sectors as part of a connecting Tasman journey
(Note: A broad free-sell code share arrangement involves both airlines
selling tickets for each other's flights under its own airline code.)
2. A revenue allocation agreement under which:
- Revenue generated across all Tasman sectors currently operated by
either airline, or which may be developed under the agreement, will be
allocated between the two carriers, and;
- A joint trans-Tasman Network Planning & Revenue Management Team
representing both airlines will oversee the Tasman operation
3. A frequent flyer co-operation agreement that will provide reciprocal
loyalty scheme benefits to members of Air New Zealand's Airpoints loyalty
programme and Virgin Blue's Velocity Rewards programme.
4. A lounge co-operation agreement that will ensure lounge access to
qualifying guests of either airline.
About Air New Zealand
Air New Zealand is recognised as one of the world's leading airlines and has
been named 2010 Airline of the Year in the prestigious Air Transport World
magazine awards. Air New Zealand delivers uniquely Kiwi journeys to more than
12 million passengers who fly to, from and within New Zealand each year. The
airline operates more than 4000 flights each week, connecting customers to 26
destinations within New Zealand and to Australia, the Pacific Islands, China,
Japan, Canada, USA and the United Kingdom.
Recent Air New Zealand innovations have included the revolutionary new
economy Skycouch as part of a new long haul experience from November, the end
of the check-in queue for domestic passengers thanks to a number of new
technologies, the world's first in-flight International Airline Concierge
service and a $50 million investment in seatback on-demand in-flight
entertainment on A320 and 767 aircraft.
About Virgin Blue Airlines Group
The Australian-based Virgin Blue Airline's Group includes Virgin Blue, second
largest domestic carrier in Australia www.virginblue.com.au and short haul
international airlines Pacific Blue www.flypacificblue.com and joint venture
with the Samoan Government, Polynesian Blue*. Together they operate a fleet
comprising of 86 modern Boeing 737-NG's, Boeing 777 and Embraer E-Jet
aircraft flying to 31 Australian and 16 international destinations in the
South Pacific and Southeast Asia. It also includes V Australia
www.vaustralia.com.au, the three class boutique style airline offering the
acclaimed service for which the Virgin Blue Group is renowned and a unique
Australian style.
*Polynesian Blue is not included in the alliance.
Ends
Issued by Air New Zealand Public Affairs
For further information:
Air New Zealand
Air New Zealand Public Affairs
ph +64 9 336 2761
Virgin Blue
Virgin Blue Public Affairs
+61 (0) 402 137 071
Virgin Blue Investors
Keith Neate, Chief Financial Officer
ph: +61 7 3295 50466
End CA:00194449 For:AIR Type:GENERAL Time:2010-05-03:11:48:18
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