The Australian Competition and Consumer Commission (ACCC) has tentatively approved Virgin Australia and Air New Zealand’s code sharing plan.

Air New Zealand and Virgin Australia submitted a proposal to the ACCC late last year, requesting permission to arrange a codeshare for trans-Tasman services. It proposes allowing Virgin to put its airline code on trans-Tasman routes operated by Air New Zealand.

The ACCC has now provided its draft determination. It proposes allowing the arrangement between the two airlines to proceed. It “has the potential to increase ticketing choices” the ACCC said in a statement.

Air New Zealand already has code-sharing deals in place with other airlines including Qantas.

What does the agreement entail?

Air New Zealand would be responsible for setting the fares which Virgin may market and resupply the itineraries for.

As a free-sale codeshare, Virgin would retain the rights to sell an unlimited number of seats on Air New Zealand trans-Tasman flights. This only applies as long as inventory is available.

The arrangement won’t apply to existing routes already serviced by Virgin Australia. This includes flights between Queenstown and Melbourne, Sydney and Brisbane. This signals that Virgin is unlikely to expand its routes into New Zealand anytime soon.

Virgin currently only flies to six international destinations. These include Queenstown in New Zealand, Tokyo in Japan, Denpasar in Bali and Port Vila in Vanuatu.

The ACCC is proposing that the agreement to be in place 5 years.

What are the benefits for frequent flyers?

The ACCC outlined a series of benefits for travellers, including more choice and increased convenience for trans-Tasman flights.

It also believes the more than 12 million Velocity Frequent Flyer members will benefit with “better program benefits”. This includes increased access to a new range of routes to trans-Tasman destinations.

The agreement also includes New Zealand international airport lounge access for Virgin Australia customers.

What’s next?

The ACCC is now seeking final submissions on the plan. Submissions close on May 8, 2024. The final determination is expected later in May.