Virgin Australia plans to add extra trans-Tasman flights from October

Virgin Australia aircraft at Sydney Airport. (Rob Finlayson)
Virgin Australia aircraft at Sydney Airport. (Rob Finlayson)

Virgin Australia plans to launch two new trans-Tasman routes and add extra flights into and out of Auckland once its alliance with Air New Zealand ends in October.

The two new routes are Sydney-Wellington – currently served only by Air New Zealand and Qantas – and Melbourne-Queenstown, which has nonstop service from Air New Zealand and Jetstar.

Meanwhile, the airline announced on Monday it would boost its schedule on flights from Auckland to Brisbane (up to three times daily on peak days), Melbourne (twice daily) and Sydney (three times daily on weekdays).

On the minus side, Virgin Australia said it would reduce Christchurch-Melbourne and Brisbane-Wellington nonstop services.

Virgin Australia group executive for airlines Rob Sharp said some flight times would change to better suit the needs of the travelling public.

“We have had a strong presence in New Zealand since 2004, and we look forward to bringing more exciting initiatives to this market very soon,” Sharp said in a statement.

The proposed schedule changes, due to kick on on October 28 2018, are Virgin Australia’s first response to the news on April 4 that it was facing life on the Tasman without a partner after Air New Zealand said it would walk away from an alliance that has been in place since 2010.

The New Zealand carrier has already announced a significant capacity increase once the tie-up is unwound at the end of October, including extra widebody services on key trunk routes such as Auckland-Sydney, Auckland-Brisbane and Auckland-Melbourne.

It is also planning to launch two new routes – Brisbane-Queenstown and Brisbane-Wellington – as well as add extra frequencies from Christchurch to Brisbane and Melbourne and thicken its seasonal schedule on Queenstown-Sydney and Auckland-Gold Coast.

Air New Zealand chief revenue officer Cam Wallace said on April 4 the decision to end the alliance with Virgin Australia was in response to changing market dynamics on the Tasman and a desire from the airline to deliver a more consistent customer experience to its own passengers by using its own aircraft.

The alliance was established seven years ago, and involved a metal-neutral, revenue-sharing joint-venture on on trans-Tasman routes, as well as reciprocal frequent flyer ben
efits.

Trans-Tasman partners Air New Zealand and Virgin Australia. (Seth Jaworski)
Heading in separate directions – Air New Zealand is dumping Virgin Australia as its trans-Tasman alliance partner. (Seth Jaworski)

An analysis of international passenger numbers for January 2018 from the Bureau of Infrastructure, Transport and Regional Economics (BITRE) – the latest month for which figures are available – showed Air New Zealand was the largest operator on trans-Tasman routes, having carried 35 per cent of all traffic in the month, followed by Qantas at 21 per cent.

Virgin Australia was third (16.1 per cent), Jetstar fourth (12.7 per cent) and Emirates fifth (9.6 per cent).

As an alliance, the combined Air New Zealand and Virgin Australia grouping represented 51.2 per cent of all passengers carried.

Meanwhile, the Emirates/Jetstar/Qantas grouping totalled 44.1 per cent. The three airlines also coordinate their operations on trans-Tasman routes.

However, since January, Emirates has withdrawn its Auckland to Brisbane and Melbourne Airbus A380 daily services.

Aviation thinktank CAPA – Centre for Aviation’s Blue Swan Daily website said in a research note published on April 5 Virgin Australia’s share of trans-Tasman traffic put the airline at a “severe disadvantage in the market”.

“So Virgin has to move,” CAPA said.

And having three major players in the market – Air New Zealand, Emirates/Qantas/Jetstar and Virgin Australia – represented something of a likely boon for travellers.

“Even though it hurts Virgin Australia, it will mean there are now three active competing groups in the market, so consumers won’t miss out,” CAPA said.

“Bottom line though: in the short term, there will be blood. And consumers, tourism bodies and airports will be the beneficiaries.”

All of Virgin Australia’s trans-Tasman flights are currently operated by Boeing 737-800s featuring eight business class seats in 2-2 configuration and 168 economy class seats in a 3-3 configuration for a total of 176.

Its trans-Tasman network consists of nonstop flights from four destinations in Australia – Brisbane, Gold Coast, Melbourne and Sydney – to five destinations in New Zealand – Auckland, Christchurch, Dunedin, Queenstown and Wellington.

The airline also has three Pacific Island routes from New Zealand, year-round Auckland-Rarotonga and Auckland-Nuku’alofa services and a seasonal Christchurch-Rarotonga offering. These are excluded from its soon-to-end alliance with Air New Zealand.

Virgin Australia chief executive John Borghetti said on April 4 the end of its tie-up with Air New Zealand on the trans-Tasman market provided opportunities for the airline group to deploy its low-cost-carrier (LCC) unit Tigerair Australia in the market.

Currently, Tigerair Australia has no international routes, having been forced to end flights to Bali in February 2017 after Indonesian regulators pulled its operating permit to serve the popular tourist destination.

Any re-entry into the international market would allow Virgin Australia to offer both a full-service and LCC option for travellers on the Tasman, while at the same time help improve the utilisation of Tigerair Australia’s Airbus A320s and Boeing 737-800 fleet.

Share of total passengers carried on Australia-New Zealand routes in January 2018

Airline
Passengers carried
Percentage share

Air New Zealand

243,965

35.1 per cent

Qantas

151,593

21.8 per cent

Virgin Australia

111,983

16.1 per cent

Jetstar

87,984

12.7 per cent

Emirates

66,849

9.6 per cent

China Airlines

12,778

1.8 per cent

AirAsiaX

7,432

1.1 per cent

LATAM

7,238

1.0 per cent

Singapore Air

4,077

0.6 per cent

Total

693,899

100 per cent

Source: Bureau of Infrastructure, Transport and Regional Economics (BITRE)

Comments

  1. Simon says

    Go JB… It doesn’t matter who you are, you’ve got to root for the underdog! Taking on government run airlines!

  2. Chris says

    Simon – Whilst NZ government is a majority shareholder of Air NZ, it does not operate under any government mandate except to make a profit using best business practices and give good dividend to the tax payer.

  3. Tony Pearce says

    Simon if the Government ran Air New Zealand the business would have gone under years ago! Yes they did bail it out but their shareholding is down to 53%. The New Zealand Government is very hands off and has no influence in day to day running as seen by ANZ’S response when Shane Jones had his grumpy outburst when ANZ pulled out of Kapiti to Auckland flights recently.

    Don’t see VA as an underdog and hopefully they will succeed it getting and holding their share of the Trans Tasman traffic. With ANZ getting delivery of their 7 Airbus A321’s starting later in the year they have the ideal planes for the Trans Tasman run where yield is important.

    Don’t ya just love competition!

  4. australianaviation.com.au says

    Hi Baxter,
    While it was not included in our story, the Virgin Australia statement on Monday said of its Dunedin route: “Virgin Australia also remains the only international airline flying to and from Dunedin.”

  5. Craigy says

    @ D Bell What are you talking about?

    It will be interesting to see in the 2018/19 financials what impact the cessation of the revenue sharing across the Tasman has on Virgin.

  6. Tony Pearce says

    Everyone should fly into Dunedin at least once just to see how far an airport can be built away form a city centre! It wouldn’t be a cheap taxi ride!

  7. Paul Brisbane says

    We usually fly in to Wellington on virgin from Brisbane and out from Auckland on Emirates to Brisbane. The virgin flight is always full, using Qantas in 5 weeks time for the return as Emirates ceased. Sure will miss Emirates lounge

  8. David says

    From Brisbane to NZ, Qantas has appalling early morning flights in both direction, in particular from NZ airports. This should help give Virgin some passengers, and maybe Virgin’s entry will encourage Qantas to offer better flight arrival and departure times.

  9. tom says

    so what does this mean ?

    QUOTE

    “Virgin Australia also remains the only international airline flying to and from Dunedin.”

    Once a week or not at all in low season, few times a week in peak season ? Our a 2100 to 2359 departure out of BNE on a Saturday night only, with fast turnaround at DUD & straight back to BNE ?

  10. ian says

    many people used to fly BNE/DUD as a cheaper alternative to getting to Queenstown(ZQN).

    Even if only $200 to $300 less per person, when you multiply this by family or 3 or more, it starts to make the 3 hour drive bearable, dollars savings wise.

    How do I know this ?

    Used to sell Queenstown until a few years ago. Over a 4 year period, sent approx. 1150 people to ZQN & another approx. 550 flew to DUD to then drive to ZQN.

    NOTE: 2nd tier rental cars companies, who mostly import used cars from Japan are cheap. eg. a mid sized SUV(4wd or AWD) for a week starts around $49/day inclusive.

    The DUD flights used to arrive around 3pm & turnaround & head back to BNE at around 4pm, which would work if driving to ZQN (get there about 7pm if no stops & leave ZQN no later than 11am if no stops & want to be at DUD 2 hours before departure). Then some rocket scientist changed arrival time into DUD to around midnight, where the aircraft sits until around 8am before heading back to BNE, timings which don’t suit a drive to ZQN & back.

    Many people still fly into Christchurch & drive the 5 to 6 hours to ZQN to save money, which is a long drive.

  11. Lucas says

    Hope that I am mistaken, however this could end in tears!! Virgin have not yet recovered from when it tried to take on Qantas.
    Too much ego, and not enough deep pockets could end up hurting VA more than ANZ.

  12. Scott says

    Virgin has been serving the Tasman since 2004 that’s 14 years, it’s as much their market as ANZ or QF, why would they take backward step. They haven’t asked for government assistance packages.

  13. australianaviation.com.au says

    Hi Marc,
    apologies for the error. The figure should be 51 per cent. The story has been updated.

  14. James says

    @ Desert Storm

    How so? It’s even mentioned in the total passengers that QF/JQ/EK carry.

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