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Air New Zealand has pulled the plug on its trans-Tasman alliance with Virgin Australia, with the two airlines set to part ways from October 28, 2018.
The move will see an end to codeshare arrangements on each other's trans-Tasman flights and is also likely to impact lounge access, earning of frequent flyer points and status credits and other reciprocal perks of Velocity and Airpoints frequent flyer status.
In its place: a fierce competition between the two airlines, which will now be free to set their own schedules and pricing in a battle for their share of passengers ‘across the pond’.
A spokesperson for Virgin Australia told Australian Business Traveller that details such as airport lounge access in the post-AirNZ era were “still to be worked through”.
As for Air New Zealand, a spokesperson for the airline "we’re working through our commercial arrangements with Virgin Australia for the period post-alliance and will make more information available on that when we can."
Passengers who have already booked a Virgin Australia codeshare flight on Air New Zealand (or vice versa) will be contacted to make new arrangements.
Air New Zealand Chief Revenue Officer Cam Wallace said that "Australia is the largest source of inbound visitors to New Zealand and Air New Zealand 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 recently said Air New Zealand would roll out more Boeing 787s and Boeing 777s across the Tasman, adding not only more capacity onto the market but international-grade business class and premium economy seats.
Virgin Australia CEO John Borghetti responded by saying the split "provides opportunities for the Virgin Australia Group on the Tasman, including operating both the Virgin Australia and Tigerair Australia brands in the market."
“Virgin Australia will continue its strong focus on providing competition and outstanding service on the Tasman, which remains an important part of our network and strategy as an airline group."
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The alliance between Virgin and Air New Zealand against common enemy Qantas began in 2010 but has grown increasingly distant over the past years, with other aspects of the tie-up having already been wound back.
Early 2016 saw Air New Zealand CEO Chris Luxon call for Virgin boss Borghetti to resign over the airline's financial performance. When Luxon's putsch failed, the Kiwi carrier sold off its 25.9% stake in Virgin Australia but pledged the trans-Tasman alliance would remain.
However, later that year saw Virgin Australia passengers turfed out of Air New Zealand's Australian lounges except when travelling to New Zealand, with these travellers spread across a maze of other lounges instead: including Virgin Australia's domestic lounge in Melbourne prior to some international flights.
In July 2017 Velocity Frequent Flyer members lost the ability to earn or redeem Velocity points on Air New Zealand's major international flights, such as from Auckland to Los Angeles or Houston, nor could status credits be earned or lounge access enjoyed prior to those same flights.