Air New Zealand has about 170 weekly return services between the two countries, while Virgin Australia
has about 100. Te other major players in this market are
Qantas and its subsidiary Jetstar, which have up to 180
return fights a week combined.
Under their alliance, Air New Zealand and Virgin
Australia have been able to rely on each other to cover
certain routes. Now they have to add their own fights
to fll gaps created when their cooperation ends. Decoupling their schedules also means changing some fight
times that had been harmonized to suit the combined
Tese moves will inject more capacity—and probably more fare wars—into an already highly competitive
market. Air New Zealand will launch two new routes to
Australia and will add frequencies elsewhere, boosting its
capacity by 15% in the Australia-New Zealand market.
Te new routes, scheduled to start in December, will
be between Brisbane, Australia and the New Zealand cities of Wellington and Queenstown. Both are currently
operated by Virgin. In addition, Air New Zealand will
add frequencies on routes from Christchurch to Australia
in October, and extra capacity will be deployed on routes
from Auckland to the three largest Australian cities.
For its part, Virgin will add two routes from Oct.
28—Sydney-Wellington and Melbourne-Queenstown.
Air New Zealand already serves these routes, and they are
also contested by Qantas Group carriers.
Virgin is increasing capacity on three of its existing
routes into the key Auckland market. It will add eight
weekly Sydney-Auckland fights, giving it a total of 19.
Melbourne-Auckland fights will increase from 10 to
14 per week, and Brisbane-Auckland will rise from 12
to 14. However, Virgin’s Auckland presence will still be
overshadowed by Air New Zealand, which has up to six
fights a day on Auckland-Sydney, and up to fve daily
fights on Auckland-Melbourne.
Te Australian carrier is also reducing frequencies on
a few routes as it reshufes its New Zealand network.
Other fights are being retimed.
In the wake of the breakup, Borghetti took pains to
stress Virgin’s commitment to the Australia-New Zealand market. Te carrier has had a “strong presence”
there since 2004, and fights between the countries will
remain “an important part of our network and strategy as
an airline group,” he said.
Although he noted it was Air New Zealand that initiated the split, Borghetti said the breakup “provides
opportunities for the Virgin Australia Group” in this
market. He said the group could introduce its LCC