Transtasman bubble: Virgin Australia, Air New Zealand and Qantas pour in capacity

Virgin Australia and Air New Zealand have poured capacity back on to the Tasman from late March in a renewal of intense rivalry — if and when the planned two-way travel bubble goes ahead.

While Qantas is saying little about its plans, it too has loaded dozens of new flights per week from March 28 on to its booking site.

Prime Minister Jacinda Ardern has said a date for the bubble could be in place from the end of March, re-energising what was one of the most competitive sectors in the world.

Virgin Australia suspended transtasman flights in March and has more than 70 services to New Zealand per week currently on sale from March 28 also.

And Virgin fired another competitive shot today, announcing it would expand eligibility of its elite frequent flyer scheme in an effort to entice them from a range of other airlines, including Air New Zealand.

A Virgin Australia spokesman said the New Zealand Government’s in-principle decision to establish quarantine-free travel with Australia was ”very much welcomed” and provided further confidence for travellers and those looking to do business across the Tasman.

”While services are currently on sale from late March, the decision gives us time to prepare aircraft and crew for re-entry into New Zealand skies.”

He said the airline would review and adjust its schedule in line with demand and the start dates for quarantine-free travel being worked through by the respective governments.

Virgin Australia shut down its New Zealand operation at the start of April, costing between 550 and 600 jobs. The airline entered administration on April 21 with more than $7b in debt.Private equity firm Bain Capital won a fierce bidding war and has recapitalised the airline, installed ex-Jetstar (and a2 Milk) boss Jayne Hrdlicka as chief executive and has redrawn battle lines with Qantas in the Australian domestic market.

Virgin and Air New Zealand had a messy split from a deep commercial arrangement with each other two years ago, weakening the Australian airline’s position on the Tasman but its bubble schedule represents an aggressive return.

Virgin’s network would include flights between Auckland to Brisbane, Melbourne, Coolangatta and Sydney.It will fly between Christchurch and Brisbane and Melbourne.Queenstown will be linked to Brisbane, Melbourne and Sydney.

The airline says passengers impacted by previously cancelled transtasman services as a result of Covid-19 will be able to use their credits on flights between the two countries.

Air New Zealand’s website shows a sharp increase in capacity and fall in prices from March 28. From as few as one flight a day between Auckland and Sydney through until the capacity ramps up to as many as five times a day one-way fares drop in half from more than $600.

A Qantas spokesman said there was a limited schedule at the moment.

”We know there’s a huge amount of pent-up demand for travel between Australia and New Zealand and we’re looking forward to adding significant amounts of capacity across the Tasman once details about the bubble and when it will begin is confirmed.”

Qantas will operate two services a week between Sydney and Auckland with Jetstar to operate two to three flights a week from Sydney to Auckland until the end of January.

Before the pandemic the airlines were flying up to 150 transtasman flights a week.

Aviation consultant Irene King said restarting the market could be complicated and first depended on very clear agreement between the two governments on a start date.

She said the governments needed to establish the conditions of entry for New Zealanders to all of Australia beyond New South Wales and the Northern Territory.

Other considerations included whether there would be a need for everyone to be trackable and traceable, how airport segregation of transit passengers who may come from Covid hotspots and those travelling between New Zealand and Australia.

Because of the pandemic’s impact on travel, King said for airlines the commercial playbook was out the window.

“Essentially all of the previous booking history of carriage between the two countries is meaningless so the airlines will have to take a punt on how much capacity, and timing of the flights.”

Airlines would need to plan around the new rules and of course ensure that the terms and conditions on the ticket to reflect them particularly as they deal with matters of compensation and insurance, delayed flights and disruptions.

The resumption of flights also had operational challenges, including whether crew who had done little flying still met competency checks and how arrivals and departures my have to be rescheduled as a result of Covid-19.

The Government has said a Cook Islands travel bubble could be in place by the end of March too.

Justin Tighe-Umbers, co-chair of the New Zealand Aviation Coalition (NZAC), said the aviation sector is hanging on by its fingernails.

The coalition had hoped the travel bubbles would provide an injection of life before Christmas.

“The news the Government is looking to establish the bubbles in the first quarter is really positive. Now we need some actual dates so the complex logistics around flights can be put in place.”

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